portion of San Bernardino County and
the Inland Empire. We more specifically
address economic issues affecting the
cities of Adelanto, Barstow, Hesperia,
Victorville, and the Town of Apple
Valley.

12 of these economic conferences, and
while listening to the Inland Empire’s
expert economist, Dr. John Husing at our
April 11th function, I couldn’t help but
think of some great statistical analysis
that I want to share.

As always, we wish to thank our
committed article suppliers (over 135)
and our newsletter sponsors for their
continued commitment to our endeavor,
and our attempt to find positive, factual,
and interesting information as it relates
to the High Desert economy.

While the national economy lost
nearly 8,770,000 jobs through this
last down turn, the nation has created
nearly 3,522,000 or 40.7% since then.
While unemployment has decreased
8.2%, we are hopeful that this number
will continue to drop. For the State of
California, unfortunately we are at the
same job levels that we were in 1999,
in essence wiping out all jobs that
were created from 1999 through 2008.
Since Dr. Husing has been following
the Inland Empire market, from 1964
through 2008 we never had any net job
loss. It was not until the period of 2008
through 2011, that we had a net loss of
146,400 jobs, or 11.4% of the number of
jobs that we have in the Inland Empire.
In 2011, the Inland Empire did create
3,700 jobs. That is positive news. The
bleeding has finally stopped.

Who said that we would never make 50
newsletters? I have so many people to
thank I don’t know where to start. Not
only do I want to thank my bride, my
partner and my motivation, Mrs. Deborah
K. Brady, Executive Vice President
of The Bradco Companies, Alliance
Management Group and Barstow Real
Estate, I want to thank our readers, our
subscribers and those that have been
the benefactors of information since
our first publication in May of 1993.
There are other publications that from
time to time attempt to copy what we
have been able to depict, but I believe
that the competition is also good in the
publication business.
We have a very exciting publication and
we are proud of the information that is in
the 50th edition. I am recently reflecting
on comments given at the High Desert
Leaders Economic Summit, a function
that The Bradco Companies has
supported with many other sponsors,
economist speakers etc. that started 14
years ago. We have recently completed

Exports out of the Los Angeles Long
Beach port are at an all time high
at 3.3 million containers for 2011.
Congratulations. While the Inland
Empire has over 1,145,000 existing jobs,
and we are optimistic that the 12.4%
unemployment that the Inland Empire’s
is experiencing, in conjunction with
California’s 11.3% (as of January 2012)
will continue to decrease. One statistic
to put things into proper prospective is
the fact that within Southern California
continued on page 28

For those of you with an unhealthy
interest in statistics, the statistical model
has estimated the number of occupied
units nationwide with an R2 coefficient
of correlation of 0.9867. In economics,
this type of correlation usually implies
the analyst is cheating. As can be seen,
the estimate of number of households
nationwide based on statistics has been

for those who know how to profit from adversity) are still in the distant future.
EXHIBIT A
TOTAL NONAGRICULTURAL EMPLOYMENT INDEX - SOUTHERN CALIFORNIA
JUNE 1990 - DEC 1995 vs. DEC 2006 - FEB 2012
6/90

12/90

6/91

12/91

6/92

12/92

6/93

12/93

6/94

12/94

6/95

12/95

6/96

12/96

6/97

12/97

1.02

1.02

1.00

1.00

0.98

0.98

0.96

0.96

`
0.94

0.94

0.92

0.92

0.90

1990's

Indexed (December 2006)

Occasionally people wonder why
nonagricultural
wage
and
salary
employment, as illustrated in Exhibit A,
figures in so many of the graphs we use.
The reason for that is shown in the graph in
Exhibit B. The little triangles are estimates
of the number of occupied units in the
United States based on a statistical model,
the major input to which is nonagricultural
wage and salary employment. The little
squares in the graph are actual households
as reported by the U.S. Bureau of the
Census.

flat since 2005. It is not expected to turn Southern California (Ventura, Los
sharply upward in the immediate future— Angeles, Orange, Riverside,
San
ALFRED GOBAR ASSOCIAT
based on the trends in Exhibit A. The Bernardino, and San Diego Counties),
number of occupied units probably will growth in nonagricultural wage and salary
rise above the estimate as the data evolves. employment in the twelve months ended
Real
Market
Anecdotal Estate
information indicates
that many Recovery?
February 2012 totaled 62,600 jobs. This
households are living in homes on which is well below the long-term average in the
they are no longer making payments on six-county area during periods of normal
As illustrated in Exhibit A, the recent recession was considerably deeper in
the mortgage—i.e., economic recovery housing markets—approximately 150,000
termsphysical
than theoccupancy
one that affected
Southern
California
after June
1990.
is percentage
often less than
in new
jobs a year.
Actually,
employment
times
of financial
duress.
growth isinanonagricultural
andthan
salary
Sadly,
the recovery
from the most recent recession
good deal morewage
anemic
employment
over
the
most
recent
twelve
was more
the previous
recovery,
happy times for real estate properties (except
With
specificity
withsuggesting
regard to
months was considerably less than the

Indexed (June 1990)

As illustrated in Exhibit A, the recent
recession was considerably deeper in
percentage terms than the one that affected
Southern California after June 1990.
Sadly, the recovery from the most recent
recession is a good deal more anemic than
was the previous recovery, suggesting
happy times for real estate properties
(except for those who know how to profit
from adversity) are still in the distant
future.

Occasionally people wonder why nonagricultural wage and salary continued
employment,
as 3
on page
illustrated in Exhibit A, figures in so many of the graphs we use. The reason for that

THE BisRADCO
HIGH DESERT REPORT
shown in the graph in Exhibit B. The little triangles are estimates of the number of
Publisher:
Mr.
Joseph
W. Brady,
occupied
units
in the
UnitedCCIM,
StatesSIOR
based on a statistical model, the major input to
Editors: Dr. Ronald J. Barbieri, CPA, Ms. April Tyler, Mr. Lowell Draper, and Mr. Seth Neistadt
which is nonagricultural wage and salary employment. The little squares in the graph
Printed & Designed by One Stop Printers & Direct Mail Service
areE-Mail
actualVersion
households
as reported
by the U.S. Bureau of the Census.
by Axiom
Media Inc.
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responsibility for inaccurate information. The Bradco High Desert Report is printed on recycled paper.

comparable figure for the twelve-month
period ended February 2011. Southern
California’s economy (and therefore
its real estate market) is not recovering
rapidly. In fact, these statistics indicate
the opposite.
No. of Households (000s)

market in which the Inland Empire is such the current trend is still down. The indices
those of you with an unhealthy interest in statistics, the statistical model has
anFor
important
segment.
for this market have deteriorated fairly
estimated the number of occupied unitsconsistently
nationwide since
with an
R2 Quarter
coefficient
of
Third
2006.
The conventional output of the models, Housing price in the Inland Empire (as
correlation of 0.9867. In economics, this type of correlation usually implies the
which was used by such investors as PMI, well as Southern California overall) has
analyst
is cheating.
can be etc.,
seen, the
estimatebeen
of number
of households
GE
Capital,
NationwideAsBuilders,
historically
high relationship
to the
from
the
1970s
to
the
1990s
consisted
of
ideal
price
structure.
Because
of declining
nationwide based on statistics has been flat
since
2005.
It is not
expected
to turn
a total of 17 pages for each market. In the demand derivative of the recession, even
sharplyofupward
in the
immediate
future—based on the trends in Exhibit A. The
interest
simplicity,
many
of the outputs
with the decreasing prices in the Inland
number
of occupied
units The
probably
will rise Empire,
above the
as thebetween
data evolves.
were
combined
into indices.
simplified
theestimate
relationship
price
index
of
housing
market
conditions
for
the
and
income
is
still
not
comfortable.
Anecdotal information indicates that many households are living in homes on which
Inland Empire is shown in exhibit C.
they are no longer making payments on the
mortgage—i.e.,
recovery
is
A similar
index for economic
Los Angeles
County,
Although
the
statistical
simulations
of
which
continues
to
be
the
largest
economic
often less than physical occupancy in times of financial duress.
current market conditions overall in the entity in Southern California, is as follows
ALFRED GOBAR ASSOCIA
Inland Empire are not quite as bad as they in exhibit D.
With more specificity with regard to Southern California (Ventura, Los Angeles,
were at the depth of the 1990’s recession,
Orange, Riverside, San Bernardino, and San Diego Counties), growth in
EXHIBIT C

2012 totaled 62,600 jobs. This is well below the long-term average in the six-County
1.05

area during periods of normal housing markets—approximately 150,000 new jobs a
1.00
year.
Actually, employment growth in nonagricultural wage and salary employment

for the twelve-month period ended February 2011. Southern California’s economy
0.90
0.85
0.80

2
III/11

III/10

III/09

III/08

III/07

III/06

III/05

III/04

III/03

III/02

III/01

III/00

III/99

III/98

III/97

III/96

III/95

III/94

III/93

III/92

0.75
III/91

Index

over
0.95 the most recent twelve months was considerably less than the comparable figure

III/90

The output of the most recent update with
extensions to Third Quarter 2011 is a basis
for illustrating housing market conditions
in each of the Metropolitan Statistical
Areas that make up the Southern California

In 1969, analysts at Alfred Gobar
Associates noticed the relationship
between nonagricultural wage and salary
employment and housing market trends.
This led the number crunchers at the
consulting company to develop a plethora
of algorithms which incorporate generally
available time series economic data
published by the government and other
sources into “models,” which simulate
housing market conditions for each
Metropolitan Statistical Area in the United
States overall. The efficacy of these
models with regard to the housing markets
in each of these Metropolitan Areas was
tested against the Census data for 1970,
1980, 1990, and 2000. Since Dr. Gobar’s
retreat from consulting, less attention has
been paid to the statistical simulation
models, although kindly old Dr. Gobar
did fund an analysis of the efficiency of
the models in terms of estimating the
number of occupied units by Metropolitan
Statistical Area as of the date of the 2010
Census.

Categories of nonagricultural wage
and salary employment experiencing
continued decline include construction,
certain portions of the financial sector,
and local government, as well as the
information sector as newspapers become
technologically less efficient than they
were prior to the Information Age.
Somewhat surprisingly, manufacturing
employment grew during the twelvemonth period contrary to the long-term
trend over the last 15 years of a secular
decline in manufacturing employment
throughout the United States and with
special regard to Southern California.

ALFRED GOBAR ASSOC

Although the statistical simulations of current market conditions overall
in theonInland
continued
page 4
The Bradco High Desert Report
Empire are not quite as bad as they were at the depth of the 1990’s recession, the
760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com
current trend is still down. The indices for this market have deteriorated fairly

Real Estate Market Recovery?
Currently the index on an overall basis is
lower than at any time shown. The index
suggests that spillover demand from Los
Angeles County is not soon likely to be a
major element in housing demand in the
High Desert.

Another of the Southern California
economies that has suffered less than the
Inland Empire is Orange County, see the
graph in exhibit F. The index for Third
Quarter 2011 was higher than in Third
Quarter 2009 or 2010, indicating a very
modest improvement in relative supply
and demand conditions in housing in the
Orange County Metropolitan Statistical
Area.

Currently
the index on an overall basis is lower than at any time shown. The index
0.85
suggests that spillover demand from Los Angeles County is not soon likely to be a
III/11

III/10

III/09

III/08

III/07

III/06

III/05

III/03

III/02

III/01

III/00

III/99

III/98

III/97

III/96

III/95

III/94

III/93

III/92

III/91

III/04

0.80

major element in housing demand in the High Desert.
III/90

Between Third Quarter 2010 and Third
Quarter 2011, Ventura County’s economy
improved enough that incremental demand
exceeded the incremental supply of new
housing based on very feeble building
permit activity in prior months in Ventura
County in 2009 and 2010. The most
recent index point is actually up a little bit
from the two previous index points for the
Ventura area.

1.00

The following index for Ventura County shows overall market conditions about similar
Currently the index on an overall basis is lower than at any time shown. The index
to what they were during the worst of the 1990s:
suggests that spillover demand from Los Angeles County is not soon likely to be a
EXHIBIT E

OXNARD-THOUSAND
CA MSA
major element in housing
demand in the OAKS-VENTURA,
High Desert.
TOTAL RESIDENTIAL UNITS INDEX
1.01

The following index for Ventura County shows overall market conditions about similar
0.99

The exhibt E index for Ventura County
shows overall market conditions about
similar to what they were during the worst
of the 1990s:

ALFRED GOBAR ASSO

Continued

1.05

0.93

1.01
0.91

ALFRED GOBAR ASSOC

0.99
0.89
0.97

0.87 in 2009 and 2010. The most recent index point is actually up a little bit from
County
III/11

III/10

III/09

III/08

III/07

III/06

III/05

III/04

III/03

III/01

III/00

III/99

III/98

III/97

III/96

III/95

III/94

III/93

III/92

III/91

III/90

Index

enough that incrementalEXHIBIT
demandF exceeded the incremental supply of new
III/11

III/10

III/09

III/08

III/07

III/06

TOTAL RESIDENTIAL UNITS INDEX

III/05

III/04

III/03

III/02

III/01

III/00

III/99

III/98

III/97

III/96

III/95

III/94

III/93

III/92

SANTA
ANA-ANAHEIM-IRVINE,
CA MDin prior months in Ventura
based on very
feeble
building permit activity

III/91

III/90

0.85
housing

1.05

Between Third Quarter 2010 and Third Quarter 2011, Ventura County’s economy
1.00

5
improved enough that incremental demand
exceeded the incremental supply of new
0.95
housing
based on very feeble building permit activity in prior months in Ventura
0.90
0.85

5
III/11

III/10

III/09

III/08

III/07

III/06

III/05

III/04

III/03

III/02

III/01

III/00

III/99

III/98

III/97

III/96

III/95

III/94

III/93

III/92

0.80
III/91

This market appears to have been immune
to the recession and, in fact, from 2006 to
2011 the index for the market increased

0.87
improved

III/90

This column has referred in the past to
economics as the “dismal science.” In a
vain hope to counter this probably accurate
definition of my life’s work, we have
included a comparable graph (Exhibit
H) for a market that is currently in much
better condition:

0.93

0.91
Another
of the Southern California economies that has suffered less than the Inland
0.89
Between
Third County,
Quarter the
2010
andfor
Third
Quarter
2011,
Ventura County’s economy
Empire is Orange
graph
which
is shown
below:

Index

As shown, the low point of the index in
recent years is well above the comparable
indicator for the 1990’s recession.

0.85
the two
previous index points for the Ventura area.

III/02

0.95

By far the strongest recovery of the
housing market in Southern California
is in San Diego County where the index
has been improving for about three years,
and incremental demand has exceeded
incremental supply, see exhibit G

Bradco
High Quarter
Desert Report
page 5
The The
index
for Third
2011 was higher than in Third Quartercontinued
2009 oron2010,
760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com
indicating a very modest improvement in relative supply and demand conditions in

year by year, while the price index shows
that housing prices in the market are
less than they need to be in terms of the
consumer support levels driven by the
local economy.

0.96

Index

0.90

0.98
0.86
0.84
0.96

III/11

III/10

III/09

III/08

III/07

III/06

III/05

III/04

III/03

III/02

III/01

III/00

III/99

III/98

III/97

III/96

III/95

III/94

III/92

III/91

0.90

III/93

0.80
0.92
III/90

Index

0.82
0.94

0.88
0.86

As shown, the low point of the index in recent years is well above the comparable
0.84

indicator
for the 1990’s recession.
0.82
0.80
III/11

III/10

III/09

III/08

III/07

III/06

III/05

III/04

III/03

III/02

III/01

III/00

III/99

III/98

III/97

III/96

III/95

III/94

III/93

III/92

III/91

III/90

This column has referred in the past to economics as the “dismal science.” In a vain
hope to counter this probably accurate definition of my life’s work, we have included a
for a market
that is in
currently
muchisbetter
Ascomparable
shown, thegraph
low point
of the index
recent inyears
well condition:
above the comparable
EXHIBIT H
TOTAL RESIDENTIAL UNITS INDEX

indicator for the 1990’s recession.

This1.10
column has referred in the past to economics as the “dismal science.” In a vain
hope
to counter this probably accurate definition of my life’s work, we have included a
1.05
Index

comparable graph for a market that is currently in much better condition:
1.00

EXHIBIT H
TOTAL RESIDENTIAL UNITS INDEX

0.95
1.10
0.90
1.05

III/11

III/10

III/08

III/07

III/06

III/05

III/04

III/03

III/02

III/01

III/00

III/99

III/98

III/97

III/96

III/95

III/94

III/93

III/92

III/91

III/90

Index

III/09

ALFRED GOBAR ASSO

0.85

1.00

Another regional economy which reflects stronger-than-typical housing market
0.95
This market
appears to
been immune
to the recession and, in fact, from 2006 to
conditions
is illustrated
byhave
the following
graph:
2011
0.90

the index for the market increased
year by year, while the price index shows
EXHIBIT I
III/11

III/10

III/09

III/08

III/07

III/06

III/05

III/03

III/02

III/01

III/00

III/99

III/98

III/97

III/96

III/95

III/94

III/93

III/92

0.99

III/91

III/90

consumer support levels driven by the local economy.

III/04

RESIDENTIAL
INDEX
that housing prices inTOTAL
the market
are lessUNITS
than they
need to be in terms of the
0.85
1.01

This
market appears to have been immune to the recession and, in fact, from 2006 to
0.97
7

2011 the index for the market increased year by year, while the price index shows
Index

0.95

that housing prices in the market are less than they need to be in terms of the
0.93

consumer support levels driven by the local economy.
0.91

III/11

III/10

III/09

III/08

III/07

III/06

III/05

III/04

III/03

III/02

III/01

7

III/00

III/99

III/98

III/97

III/96

III/95

III/94

III/93

III/92

III/91

0.89
III/90

An interesting anomaly related to the most
recent analysis of these statistical data
concerns the composition of employment
growth. As noted in the early part of this
column, nonagricultural wage and salary
employment grew less between 2011
and 2012 than it did in the prior twelve
months. Another source of employment
data, however (based on the household
survey), reflects a humungous increase
in employment as reported by individual
households. Typically, the difference
in estimated employment between the
household survey and the establishment
survey relates to contract workers, small
entrepreneurs, underground employment,
etc. For long periods of time, the
employment levels estimated on the basis
of the employer surveys have been about
±87.0 percent of the employment levels
estimated on the basis of the household
survey. The most recent data available,
however, suggests that reported change
in nonagricultural wage and salary
employment based on the employer
survey was 58.0 percent of the level of
employment change estimated on the
basis of the household survey. Either an
awful lot of people are working “off the
books” or there is a glitz in the reporting

0.92

1.00
0.88

Another regional economy which reflects
stronger-than-typical housing market
conditions is illustrated by the exhibit I
graph.
Although there has been some decrease
in overall market strength (i.e., demand
exceeds supply), it still remains a very
viable real estate market in comparison
with much of the U.S. Perhaps Joseph
W. Brady wants to sponsor a contest for
readers of this column to identify these
two mystery markets which are apparently
doing well despite the abysmal conditions
in much of the rest of the U.S. (at least the
statistics are a whole lot better).

Although
there High
has been
decrease in overall market strength (i.e., demand
The Bradco
Desertsome
Report
760.951.5111 • Fax: 760.951.5113exceeds
• www.TheBradcoCompanies.com
email:viable
info@thebradcocompanies.com
supply), it still remains a•very
real estate market in comparison with
much of the U.S. Perhaps Joe Brady wants to sponsor a contest for readers of this

6

High Desert Report
A quarterly economic overview

MDAQMD Board Reaffirms Support Of
AB 32 Suspension

Real Estate Market
Recovery?

By Violette Roberts, Community Relations & Education Manager
During its February 2012 meeting,
the Governing Board of the Mojave
Desert Air Quality Management
District reaffirmed a resolution
requesting a suspension or revision
of AB 32 – the Global Warming
Solutions Act of 2006 – which it
originally adopted and forwarded to
then-Governor Schwarzenegger in
2010.
AB32 requires the California
Air Resources Board to develop
strict new regulations and market
mechanisms to reduce California’s
greenhouse gas emissions to 1990
levels by 2020, representing a 30%
reduction statewide, with mandatory
caps beginning in 2012 for significant
emissions sources.
The resolution – which was brought
to the local regulatory air agency’s
Board by MDAQMD Board Member
and City of Victorville Councilman
Mike Rothschild – was accompanied
by a letter from District Governing
Board Chair and San Bernardino
County First District Supervisor
Brad Mitzelfelt, which outlined
the MDAQMD Board’s ongoing
concerns with AB32’s continued
implementation.
“To date, there continues to be a
failure to consider potential regulatory
conflicts between AB 32 provisions
and federal and state mandates in
the AB 32 implementation process,”
said Mitzelfelt. “In addition, an
analysis of the potential impacts of
multiple requirements on the local
economy and ultimately, on the
environment, have been minimal,
at best.”
Rothschild added that
while the MDAQMD Governing

Continued

Board composition has changed
since 2010, “the key factors which
render AB 32 a threat to the High
Desert’s economy have remained
virtually unchanged.” These factors
include an unemployment rate of just
under 15%, a severe jobs/housing
imbalance, substantial air pollutant
and greenhouse gas emissions
resulting from over 50% of all area
residents commuting at least 40 miles
to work each way, and transported
pollutants from the Los Angeles basin.
Moreover, according to Rothschild,
AB 32 threatens to engender indirect
environmental consequences - such
as longer, more polluting commutes
- as a result of businesses and jobs
leaving the area.

or our interpretation of the numbers. We
have been interpreting these numbers for
roughly 40 years and have never seen
this kind of relationship before. Since it
is a one-time event, it could have been a
typographical error, a simple transposition,
or some other statistical screw-up. Not too
much should be inferred from this unusual
circumstance. Nonetheless, it is consistent
with what we expected to happen with the
onset of a highly-regulated society—an
increase in informal employment as the
market system worked to side-step a
stifling bureaucracy. The late Jack Kyser
and I discussed the implications of the
Obama Administration’s ideology at a
meeting a little over two years ago and
hypothesized that the informal economy
would grow faster than it has in the past in
response to overregulation, mitigating to
some extent the negative effects on growth
of a highly-regulated economy.

In addition to sending the adopted
resolution and letter to Governor
Brown, the documents were also
forwarded to CARB, state legislators,
and to directors of California’s 34
other air districts.

If, in fact, the informal job growth was
actually as great as the statistics seem
to indicate, the overall condition of the
market should be better than the graphs
shown above suggest.
Let’s hope so.
Readers interested in reviewing Dr.
Gobar’s observations about the statistical
relationship of real estate market behavior
to conventional economic time series data
are referred to his book which is available
from Alfred Gobar Associates.

Industrial Firms Continued To Absorb Space In The Inland Empire
At A Very High Rate In 2011
By: Ronald J. Barbieri, Ph.D., CPA

One of the primary economic drivers
of the Inland Empire and therefore
the High Desert is the expansion of
warehousing and distribution facilities
as well as manufacturing operations
in the Inland Empire. Such industrial
operations provide Base Employment
for the region which in turn generates
Secondary Employment in other
economic sectors of San Bernardino
and Riverside Counties. Over 60,000
residents of the High Desert commute
to the Los Angeles Basin for work.
This represents approximately half the
workforce of the High Desert. Hence,
an increase in the demand for industrial
space in the Inland Empire has a positive
indirect effect on the High Desert.
Also, the absorption of industrial space in
the Inland Empire would further reduce
the limited supply of industrial land in
the Los Angeles Basin. A study by John
Husing dated August 2008 determined
there were only 4,860 acres of land in
the Los Angeles Basin portion of the
Inland Empire that could be developed
for industrial use. This number could be
significantly reduced over the next few
years, thereby reducing number of sites
that are rail served or can accommodate
the development of large industrial
buildings. It will not be long before the

very large industrial tenants or firms
that require rail will have to locate in the
High Desert or in the area along the I-10
Freeway in Banning, California; The
migration of more industrial firms to the
High Desert would create more Base
Employment in the area, which in turn
could generate additional Secondary
Employment. This would lead to lower
unemployment rates in the greater
Victor Valley area.
There is 499 million Square Feet (SF)
of industrial space in the Inland Empire.
This is equivalent to half the inventory
of industrial space in the greater Chicago
area. Costar defines 482 million SF as
Warehousing/Industrial space.
The
remaining 17 million SF is in smaller
Industrial Flex space. The High Desert
currently accounts for slightly over
4% of the total inventory; but in the
intermediate term and beyond it is
expected to be the primary expansion
area for industrial development in the
region. Southern California is home
to almost 2.0 Billion SF of industrial
space. Much of the increased demand
for industrial space in the Inland Empire
is attributed to firms relocating out
of Los Angeles County in search of
industrial sites on which to build larger,
more efficient facilities.

The vacancy rate for Warehousing/
Industrial space in the Inland Empire
has increased from 5.2% at the end of
2004 to 12.2% by the end of 2009. The
increase in vacancy was the result of
overbuilding rather than a decline in
industrial demand. The vacancy rate
at the end of the Fourth Quarter 2011
declined to 7.5%. Very little inventory
was added in 2010 and 2011; but there
was a substantial absorption of large
box industrial space during that two year
period. If the vacancy rate declined to
5% the industrial market in the Inland
Empire would be in equilibrium. That
could occur by 2013 if the developers
do not build an excessive amount
of inventory that is not preleased.
Developers are beginning to build spec
large box industrial space in the Los
Angeles Basin.
There are a limited number of sites
in the Los Angeles Basin that can
accommodate large industrial boxes
greater than 800,000 SF. Industrial
tenants and users wanting larger
facilities will have to locate either in
the High Desert, Moreno Valley, or
Banning California. The lack of larger
industrial sites in the Los Angeles Basin
could result in a substantial increase in
the level of industrial development in
the High Desert beginning as early as
2015.
In calendar year 2007 the Net
Absorption of industrial space peaked at
almost 27 million SF. In 2008 industrial
demand increase by 4.6 million SF;
but in 2009 the Net Absorption was a
negative 400,000 SF. Net Absorption in
the Inland Empire was a positive 12.1
million SF in 2010 and 15.0 million
SF in 2011. A portion of the increase
in Net Absorption was caused by the
acceleration of demand due to relatively
low rents compared to prior years.

Industrial Firms Continued To Absorb Space In The Inland Empire
At A Very High Rate In 2011
Continued

The increase in industrial demand in
the Inland Empire in the last two years
is substantial, especially in light of the
slow economic recovery in both the
U.S. and California. In fact the Inland

agents in the Los Angeles Basin are now
reporting Excess Demand (no vacancy)
for buildings of 500,000 SF and larger.
Most of the vacancy is in the medium
and smaller size buildings often

Desert, though the timing is uncertain,
and unfortunately very much a function
of public policy that will be determined
in Washington and in Sacramento,
California.
In spite of all the political and economic
uncertainty the big box industrial
market in the High Desert is likely to
add one or more users each year for the
next few years before the increase in
demand accelerates in the second half of
this decade. This will probably be the
case because large industrial users will
continue to relocate from Los Angeles
County to the Inland Empire in order to
build larger, more efficient facilities. As
the availability of large industrial sites
in the Inland Empire diminishes those
seeking larger sites will have no choice
but to locate in the area of Banning,
California or in the High Desert. Only
an economic depression would defer
this from happening.

Empire only experienced one year of
negative industrial absorption during
the last recession.

occupied by small businesses that have
not experienced much growth since the
Great Recession.

From 2005 through 2008 an average
of 26.1 million SF of Warehousing/
Industrial space was delivered annually
in the Inland Empire.
Deliveries
declined to 7.0 million SF in 2009. Only
1.7 million SF was delivered in 2010;
while 3.8 million SF was completed
in 2011. The level of new construction
has definitely increased in the last
year. This limited level of construction
coupled with the unanticipated increase
in industrial absorption has resulted in
the elimination of half of the Excess
Vacancy in the market place.

Industrial agents are now suggesting
there will be a new wave of construction
for buildings larger than 500,000 Square
Feet. When this is coupled with the fact
there are only 4 sites in the Los Angeles
Basis that can accommodate a building
greater than 800,000 SF it is logical to
conclude it will not be long before the
High Desert
will be able to
Proud to be a part
successfully
of the
compete
for
the
larger
High Desert Community
warehousing
and distribution
tenants.
A
higher
level
of industrial
MITSUBISHI CEMENT CORPORATION
development
5808 STATE HIGHWAY 18
will
occur
LUCERNE VALLEY, CA 92356-9691
in the High
(760) 248-7373 FAX: (760) 248-9002

The vacancy level was 22.1 million SF
at the end of 2005. It peaked at 57.9
million SF by the end of 2009. As of
the end of 2011 it had declined to 36.5
million SF. There is still an estimated
15 million SF of Excess Vacant space
in the Inland Empire; but the industrial

All the inventory, absorption, and
construction information contained in
this article was obtained from reports
The Bradco Companies generated from
Costar. These numbers are deemed
to be accurate by real estate industry
standards; but they are not exact and
subject to change.

Turning the Green State Golden Again
By: Assemblyman Tim Donnelly, 59th District

You have probably heard of cap and trade,
but like most, you may have no idea what
it actually is. Regardless, you are paying
for it roughly every 3 days. Today,
simply filling your gas tank so you can
get to work and provide for your family
feels like dropping a down payment on
a brand new car. You are seeing and
feeling the impacts of these misguided
cap and trade policies instituted by out
of touch lawmakers. Prices are going
up. It is only the beginning, and your
government CAN do something about it.
The Governor can STOP it. I would argue
that is in fact, the duty, of the Governor
to undo this harm by suspending AB 32
and by scaling back on the California Air
Resource Board’s (CARB) power.
California politicians have long tried to
create a Green Utopia under the auspices
of “saving the planet.” So, in 2006, the
Legislature passed AB 32 – California’s
version of “Cap and Trade,” which
constituted the most sweeping expanse
of environmental regulations up until, or
since, then. It essentially put the ability to
pollute in the process of manufacturing up
for sale to the highest bidder. This meant
that only large corporations could afford
to purchase this new hot commodity and
continue to keep up with the costs to do
business, while the local “mom and pop”
shops couldn’t afford the “carbon credits”
necessary to keep their operations going.
Since its passage, our unemployment rate
has skyrocketed and it will only continue
to do so as long as it stands. This is both
irresponsible and a gross abuse of power.
No matter where you stand on the issue
of global warming, the simple truth is that
your government is dictating based on
science that is nowhere near settled and
is ruining our livelihoods and economy
in the process.
AB 32 has an impact on nearly every
sector of our economy, including
manufacturing, construction, housing,

and transportation. It even impacts
school bus access. For instance, one
new regulation requires tractors to idle
for 4 straight hours to clear the soot trap
after only running for 4 hours. It further
mandates that an operator must man the
tractor at the business owner’s expense.
How is California improved by this new
regulation? Additionally, we see cement
companies dropping like flies. Within
our air quality district, we dropped from
11 to 8 just last year.

That is why, this year, I am running AB
1721 to ensure businesses are given a
warning for first violations, rather than
fined for simply missing yet another rule
coming from the California Air Resources
Board (CARB). With support from
business owners, we have a good chance
of pushing forward this common-sense
piece of legislation to lessen the blow
to California’s job creators. Still, much
more is required to reverse California’s
business and job-destructive course.

I recently asked a friend I did business
with years back to share his perspective
on what the State can do to improve the
business climate.

Good public policy hinges on two things:
First, doing the right thing, and second,
Doing the thing right. AB 32 does
neither.

He told me with pain in his voice about
how businesses, the backbone of our
economy, are struggling to breathe in the
suffocating, regulation-laden California
environment. Worse yet, while the State
emits rule after rule, it fails to notify the
people whose taxes and production it
relies on to continue operating. Instead,
it imposes fines on business owners who
may fail to keep up.

The right thing is certainly not to sink
billions of taxpayer dollars into unfounded
theories while simultaneously bleeding
California businesses one restriction
at a time. This is especially true when
the policy does not even accomplish its
stated goal!

“You’d think they’d be required to
inform me at the very least, considering
the enormous cost of not complying fines and penalties that often run into the
tens of thousands of dollars,” he said.
In California though, a truck driver--the
person who delivers fresh food to our
stores--can be fined $1000 for failing to
have a certification slip in his truck at any
given time, even if he is in fact certified
and in compliance with all emission
standards. What is the net effect of this
kind of non-sense regulation? It is no
surprise - trucking companies are moving
out. They are now setting up shop and
building the economy of bordering
states. Our economy is dying the death
of a thousand regulations just to continue
feeding the bureaucratic beast that is
California.

Ironically, the “green police” have
done nothing to decrease air pollution.
Increasing restrictions on businesses
only serves to force them out of state, or
even out of the country. Many businesses
are choosing to open in or relocate to
China. California then not only loses
revenue and jobs, but actually increases
pollution since other states and countries
have far more lenient environmental
laws. Even before AB 32, for every
dollar that California and China spent
on manufacturing, California produced
¼ the carbon emissions that China did.
Now California has taken it too far. This
means dirtier air for all of us as more
production moves out of the state. (Air
does not recognize international borders
the last time I checked.) AB 32 is actually
increasing air pollution!
California’s irresponsible, go-it-alone
approach to its environmental crusade
continued on page 10

The High Desert remains the number
one desert location for the film industry
in California. Why you ask? It is
really a simple answer – terrific light,
diversity of locations (from a mountain
community to the vast sand dunes at
Dumont), experienced crew and service
providers, and ease of permitting with
the Inland Empire Film Commission
serving as the One Stop Permit Agency
for the County of San Bernardino, the
United States Forest Service, and the
Bureau of Land Management.

Special Effects Permitting Update
We are delighted to announce that
the San Bernardino County Board of
Supervisors approved an ordinance
that will streamline the process of
issuing film permits by eliminating the
requirement to get an explosives permit
in addition to a filming permit as long
as they have a valid pyrotechnic and
special effects license current with the
State of California. This was a project
the IEFC started in 1996 but it took
the team of George Watson, Chief of
Staff to Supervisor Neal Derry, San
Bernardino County; Michael Delgado,
Government Relations Officer, CAO’s
office, San Bernardino County; Curtis
Markloff, San Bernardino County Fire
Department and Todd Cole, Sgt. San
Bernardino County Sheriff to complete.

Filming Update Since October
2011 To Present
Seven feature films selected locations
from El Mirage Dry Lake to the Dumont
Dunes. Two of the more notable feature
films was “G.I. Joe: Retaliation” starring
Channing Tatum, Dwayne Johnson and
Bruce Willis; and “Seven Psychopaths”
starring Woody Harrelson, Colin Farrell
and Christopher Walken.
Reality television has become the main

stay of television production for the
High Desert region with shows such
as “Stunt Busters,” “Pawn Stars,” and
“The Biggest Loser” to name a few.
When 17 commercials selected
locations in the desert, the commercials
highlighted a number of the dry lakes
in the districts with El Mirage Dry lake
being the most used of all of them.
Watch for these commercials and enjoy
our locations being introduced to the
world. A few of the car commercials
were BMW, Chevy Volt, Lexus, Kia,
Mazda and Subaru. Some of the other
commercials that were not car related
were Absolut vodka, Graiman, and
Trane AC units.
Still photographers still consider the
High Desert lighting and diversity to
be perfect for their requirements. Fifty
two still photography shoots with both
National and International products such
as Neiman Marcus, Glamour, Calvin
Klein, American Eagle, Lefthansa
Airlines, Rolling Stone Magazine,
Nordstrom, Urban Outfitters and
Mercedes Benz were shot in the High
Desert region from Barstow to Baker.
The town of Joshua Tree enjoyed an
increase in production during this period
also.

has become all but a state mandated
religion. If you don’t buy it, you are
silenced, as has been seen with numerous
teachers and scientists facing job loss for
countering the environmentalists’ policy
conclusions. Never mind that the science
behind global warming promotion is
documented to be fraught with fraud.
For every hard working Californian who
loses his job, for each mom who gets a
sick when she sees the rising food prices
when shopping for her family, the results
of this bill to the ordinary citizen are
becoming impossible to ignore.
California, once the Golden State, can
turn this around, but it will require
keeping the “green police” from locking
up our vast potential. We must stand
up for California and demand that this
massive legislative error be reversed so
our communities and our businesses do
not continue to suffer for the sake of a
green dream.
59th District Assemblyman Tim
Donnelly can be reached at:
DISTRICT OFFICE
15900 Smoketree Street, room 100
Hesperia, CA 92345
(760) 244-5277, (760) 244-5447 fax
assemblymember.donnelly@assembly.ca.gov

Do you ever wonder about all of the
music videos that are watched daily and
where they are shot? Out of the 18 music
videos that selected the
High Desert here are
just a few: Michael
Saranga (Coyote Dry
Lake), James Durbin
(Coyote Dry Lake),
Megdelena’s “Drown in
Me” (Soggy Dry lake),
Keith Urban (Silurian
Dry Lake), Liz Primo’s
continued on page 11

repeatedly stated that the sole reason for
the very expensive and widely criticized
takeover of the Johnson Valley area is to
prepare Marines for land-based battles in
Iraq and Afghanistan, General Amos has
confirmed that this proposed expansion
is no longer necessary or even critical to
the future of the Marine Corps.
“ Wind Me Up” (El Mirage Dry Lake),
Marc Lavoine (El Mirage Dry Lake).
Twenty one other productions selected
varied locations in the High Desert
such as the Town of Joshua Tree; and
the City of Twentynine Palms had the
documentary TV series “Who the Bleep
did I marry?” shoot on various streets
throughout the city.
Each year a film crew comes out to
record the actions at one of the biggest
desert racing events in the Nation called
“King of the Hammers.” This 5-day
event always selects Johnson Valley
and is filled with races, vehicle rock
climbing, etc. that have an audience of
over 25,000 people attending.

Johnson Valley Update
For those who weren’t aware that
Johnson Valley had been slated for use
by the Marine Corp. out of Twentynine
Palms which would have meant a loss
of the use of most of Johnson Valley
to both the Production Industry but
also the recreational users as well. An
article published on December 11,
2011 by writer Robert Burns of the
Associated Press quotes Marine Corp.
Commandant General James F. Amos
stating that the future of the Marine
Corps lies in a “smaller, versatile seabased fighting force based primarily
around the Pacific, including bases in
Okinawa and Australia....but not in Iraq
or Afghanistan.”

California Tax Incentive Update

 Estimated total aggregate direct
spending by Program projects - $2.9
Billion
 Estimated total below-the-line wages
paid / to be paid by Program projects
- $1 Billion
 An estimated 32,000 crew and 8,900
cast members have been / will be
hired by the approved projects

The California Film Commission has The CFC will be accepting applications
been tasked with overseeing a five-year, for its next round of tax credits on June
$500 million dollar program (recently 1, 2012. Please visit its website for
extended by one year), which provides more information - www.film.ca.gov/
tax credits to eligible film and TV incentives.
productions that meet specific criteria.
The program, which launched in July As anticipated, Assemblymember Felipe
2009, targets those productions most Fuentes introduced a bill (AB 2026)
likely to leave the state due to incentives seeking to extend the Film & Television
offered by other states and countries. Tax Credit for five years through 2019The program has succeeded in attracting 2020. Please join the effort to extend
the target groups of basic cable TV the tax incentive program for California
series, mid-sized feature films and TV by contacting your state representatives
movies. This has enabled California and encourage them to vote for bill AB
to be competitive and keep many at- 2026.
risk projects in the state. To date,
approximately
$400
million in tax credits
has been allocated
� Publications
� Direct Mail Marketing
(reserved),
resulting
� Brochures
� Presentation Folders
in:
� Newsletters

Will a Big Quake Leave Our Water Supplies “High and Dry?”
By Art Bishop, President, Mojave Water Agency Board of Directors

[The following excerpts are from a
February 22, 2012 article by Aaron
Task of The Daily Ticker] “…The Strait
of Hormuz is a waterway that connects
the Persian Gulf to the Arabian Sea. It is
the only passage to the open ocean for
some of the biggest oil producers in the
Middle East…
…Because so much of the world’s oil
travels through the Strait, any disruption
to the shipping channel would have a
major impact on global crude oil prices,
which ultimately determine the price we
pay for gas at the pump.
Some analysts estimate the price of
oil could go up by 50% within days if
there’s a disruption of supply, which
would mean much higher prices for us
filling our tanks at the gas station — and
anything else that requires the use of
oil. Crude oil and gas prices have risen
sharply since September in large part
because of the threat of a disruption in
the Strait of Hormuz…”
Once again, America is at the mercy
of overseas oil producers and because
of the instability in the Persian Gulf,
we are paying much higher prices for
gasoline—and the gasoline equivalent
of “the Big One” (closing the Strait of
Hormuz) hasn’t hit.
Californians face a similar crisis as
the Strait of Hormuz, but our “Strait”
is the Sacramento-San Joaquin Delta,
and our “oil” is our water supply.
We’ve been told for years when it
comes to earthquakes, the “Big One”
could happen at any moment and that a
significant portion of the state’s water
supply could be wiped out for a year
or longer. So we buy earthquake kits,
flashlights, bottled water, extra canned
food for our homes—we take action to
prepare. Billions of dollars have been
spent retrofitting bridges, highways,
hospitals, schools and prisons. But to
date, no effective measures have been
taken to secure our water supply in
the event of an earthquake.

Because of prudent management
by the board of directors, including
establishment of a water banking
program, Mojave Water Agency’s
service area would likely not be adversely
affected like other areas in the state in
the event of a catastrophic earthquake.
But the region’s supplies won’t last
indefinitely. It’s time to retrofit our
state’s water delivery system.
The main concern is about a 6.7
earthquake striking Northern California
and its effect on the Sacramento-San
Joaquin River Delta, a network of rivers,
streams, marshes and grasslands—the
largest estuary on the West Coast
and home to unique communities and
farming interests, and it currently
doubles as the state’s primary water
conveyance system, sending freshwater
to 25 million Californians throughout
Northern, Central and Southern
California.
But that water is ushered through by
100-year old levees that are weak,
poorly engineered and could collapse
in the event of an earthquake. If that
happens, water from the San Francisco
Bay would rush into the Delta, turning
freshwater into saltwater. The economic
toll of this seismic event could amount
to $40 billion from losses in water
supplies, farm production, wages and
jobs, and downed utilities.
To avoid a catastrophe as described
above, public water agencies have been
working with state and federal agencies,
environmental
organizations,
and
other stakeholders on a comprehensive
plan to protect California’s water
supply, protect local communities, and
restore the Delta’s ailing ecosystem.
The plan, known as the Bay Delta
Conservation Plan (BDCP), couples a
new water delivery system with habitat
restoration to achieve long-term water
supply reliability and a healthy Delta
ecosystem.
New infrastructure -- either a tunnel or

canal -- would carry a carefully managed
portion of water underneath or around
the Delta, rather than through the fragile
ecosystem and away from the weak
levees. By doing this, we would restore
reliability to our water supply, protect it
from floods and earthquakes, improve
water quality, all while restoring and
protecting the Delta ecosystem.
The BDCP is likely to be one of
the largest public works projects in
California history and public water
agencies have already agreed to provide
the funding for construction. With five
years of research and planning, and
more than 300 public meetings already
complete, the state is now close to
finalizing the BDCP and beginning the
environmental review process.
A survey released last month by
California public opinion research
firm Probolsky Research (http://www.
probolskyresearch.com/new-pollcalifornia-voters-support-water-bondbut-display-little-knowledge-of-thebay-delta/) indicates that:
 78 percent of Californians did not
know what the Delta is
 86 percent of Southern Californians
did not know about the Delta
 70 percent of respondents outside of
Southern California did not know
about the Delta
It’s time for residents throughout the
state to get informed and understand
the risks to our water supply system
and the solutions presented by
the BDCP. The Southern California
Water Committee, including support
from Mojave Water Agency, has
launched a public education program,
“Delta Disrupted,” to provide more
information on this critical issue.To
learn more, to request materials or to
download a sample letter of support
for the Bay Delta Conservation Plan,
check out www.socalwater.org/deltadisrupted.

How Desert-Mountain Leaders Are Re-Engineering Their Workforce
STEAM 2020-A Local Initiative for Economic Success
By Dale Marsden, Ed.D. Superintendent Victor Elementary School District

Imagine a Desert-Mountain region where
every student graduates from high school
concurrently with their community
college degree or a vocational, technical
or trade school equivalent certificate
in a STEAM (Science, Technology,
Engineering, Arts, or Math) related
career field. Well that is exactly what
is happening in this region! From
Victorville to Hesperia, Apple Valley to
Adelanto, and Baker to Big Bear, leaders
from five key sectors - Public, Private,
Higher Education, K-12, and Service
and Faith-Based Organizations - are
entering into a collective effort, which
will align regional resources to ensure
a systemic approach that ultimately reengineers its workforce.
What does this look like on the ground
and in the trenches? It all started with a
kick-off event last summer when a score
of community and educational leaders
came together to draw a line in the sand
and make a commitment to this goal:
By 2020, every child and adult in
the Desert-Mountain region will be
prepared for the 21st Century workforce
by achieving their high school diploma
concurrently with their community
college degree, or vocational, trade or
technical school equivalent certificate,
in a STEAM (Science, Technology,
Engineering, Arts or Math) related
field.
Every person who attended the event
pledged their commitment, including
Mayor Ryan McEachron, Community
College President Dr. Christopher
O’Hearn, Chamber of Commerce CEO
Michele Spears, and several other key
community and educational leaders.
From this meeting, and with the assistance
of Inland Empire Economist, Dr. John
Husing, and leading Commercial Real
Estate Broker, Joseph W. Brady, CCIM,
SIOR, President of the The Bradco
Companies and Trustee for the Victor

Valley Community College, the stage
was set in November for a Solutions
Summit.
Nearly 300 key sector leaders joined
together during the Summit to hear
presentations from: Craig Garrick, CEO
of Aviation Assurance, explaining how
his business is prepared to grow from
250 employees to over 2,500; Dr. Gary
Thomas, County Superintendent of
Schools, on just how desperate things
are in our current educational system
and a high school diploma is no longer
enough; Joseph W. Brady, highlighting
the potential for the region and what
every leader must do to take advantage of
the opportunities in their own backyard.
The keynote speaker for the event, Dr.
John Husing, left the audience with
an unquestionable understanding that
the key to the region’s success is a reengineering of its educational system
to ensure a prepared workforce. Key
leaders then divided into groups to
establish strategies or “Solutions” to
achieve the STEAM 2020 Goal, and to
better align regional resources to this
end.

objectives, metrics and action plans to
achieve STEAM 2020. In January, a
smaller representative group hammered
out the details to include three key
strategic goals for the initiative: Career
Readiness,
Communication,
and
Funding. Action steps outlined plans
for a K-16 student tracking systems
to electronically monitor the success
of each child; there was a call for
comprehensive “soft skills” training,
including financial life planning; a plan
to survey employers to assess gaps in the
school curriculum; a plan to establish
a communication center for STEAM
goal engagement and development; and
a plan to target regional resources and
develop key sponsorships and funding
for programmatic goals.

Some of the solutions developed during
this inaugural Summit included the
development of a Speakers Bureau of
leaders from the community, Increasing
parent knowledge about educational
opportunities in the region, Creating
Virtual Field Trips to local businesses,
Increased Internships, and Increased
Access to Certificate programs at Victor
Valley College. This was a passionate
group who all wanted to participate in
following up on next steps to ensure
implementation of these key strategies
to achieve the goal.

In addition to these meetings, education
and business leaders participated
in several workplace tours of local
manufacturing and research and
development firms. During the tour of
Scott Turbon Mixer in Adelanto, students
from Sultana High School in Hesperia
filmed the entire tour to begin a series
of virtual field trips so more students
can experience the real world of work
in their own community. Craig Garrick,
CEO of Aviation Assurance, asked us
to be sure when kids come to tour local
businesses, we bring their parents with
them! Once leaders finished the first half
of the day at Scott Turbon, they headed
over to Exquadrum, a small but very
powerful Research and Development
firm in Adelanto and listened to Vice
President & Chief Operating Office Eric
Schmidt explain about the skills needed
for developing the latest technologies
for the Warrior. This is rocket science!

Since the November meeting, much
has taken place. Later in December,
a workgroup of about 60 key leaders
came together to draft strategic

Now with action plans established, next
steps include having a community cabinet
in each city or town comprised of key
sector leaders who will meet regularly

2011 unemployment rates are shown in the following chart. The rates shown
are National, State of California, San Bernardino County, and the High Desert
Region.
It appears that 2011 was a year of fairly high unemployment for most of the nation
as well as California. The High Desert cities had even slightly higher unemployment
rates for most of the year than either the nation or the state.

to monitor progress. Additionally,
representatives from each participating
city and town will attend regional
meetings where all resources will be
presented and aligned to fit the tailored
needs of each area within the region. As
this work continues, the Desert-Mountain
region is already looking ahead to build
capacity for long-term strategic success.
Several national models for community
engagement have been studied and the
region, under the leadership of the San
Bernardino County Superintendent of
Schools Alliance for Education, plans to
align itself to the nationally recognized
STRIVE Together Model out of Ohio.
Its slogan is “Cradle to Career” - what an
amazing testimony of one community’s
efforts to ensure success for all. For
additional information, you may contact
Dr. Dale Marsden, regional lead for the
STEAM 2020 initiative, at dmarsden@
vesd.net.
Dr. Dale Marsden is superintendent of
the Victor Elementary School District,
one of the county’s highest performing
districts, and member of the executive
board for the San Bernardino County
Superintendent of Schools Alliance for
Education. Dale and his family have
lived in the High Desert since 1990.

The last four months of 2011 did show a slight downward slope in unemployment
rates, which we hope will continue throughout 2012. The data shows that it is
trending in a more favorable direction for the economic growth of California, San
Bernardino County, and the High Desert Communities.
Contributed by the staff of the EDD Workforce Services office in Victorville.
Please contact (760) 241-1682 for further information.
The Bradco High Desert Report
760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com

15

High Desert Report
A quarterly economic overview

Snapshot of The Commercial and Industrial Real Estate Markets in The High Desert
By: Ronald J. Barbieri, Ph.D. and CPA

Office Market
As of the end of 2011, the High Desert
had almost 5.5 million SF of office
space. The net absorption for 2011
was negative 8,900 SF compared to
the 135,000 SF absorbed in 2010. The
vacancy level at the end of last year
was 347,000 SF or 6.4% of the total
inventory. The increase in the vacancy
rate was mostly due to the delivery of
62,000 SF of office space in the second
half of last year. Most of the increase in
office space demand over the last two
years was from the expansion by local
government and the medical profession.
There was 25,000 SF of office in Apple
Valley under construction as of the end
of 2011. The new construction is targeted
for medical users. While the office space
is only slightly oversupplied, there
has not been any additional demand
for space in the High Desert. This has

resulted in a slight decline in rental rates
over the last year.

Retail Market
There was 15.6 million SF of retail space
in the High Desert of which 1,352,000
SF was vacant at the end of 2011. This
represents a vacancy rate of 8.7%. The
High Desert experienced a negative
net absorption of 67,000 SF in 2011,
compared to a positive 262,000 SF in
2010. Only 6,900 SF was delivered in
the second half of that year. Macy’s
has announced that they would be
moving into a vacant 70,000 SF former
department store in the Victor Valley
Mall and adding an additional 30,000 SF
to the structure. However, this will not be
reflected in the absorption figures until
early 2013. Three super Wal-Marts in
Victorville, Hesperia and Apple Valley
are under construction and are expected

to be completed this year.

Industrial Market
There was 20.4 million SF of industrial
space in the High Desert at the end
of 2011. The vacancy rate was 6.1%
or 1,241,000 SF. The net absorption
in 2011 was 978,000 SF, which was
approximately the same the prior year.
There is 49,600 SF under construction.
Most of the absorption was in the large
boxes. Substantial warehousing and
distribution as well as manufacturing
companies counted for the increase in
demand. The cities of Adelanto and
Barstow accounted for the negative
absorption in 2011. The City of
Victorville absorbed over 1,000,000
in both 2010 and 2011. Most of this
increased demand occurred at SCLA.

Federal Port Taxes Need To Be Reinvested In The Ports
By Senator Jean Fuller

California’s system of ports and goods
movement might not be something
many of us think about everyday.
But recently, I felt it was important
to lend my name to an effort for the
maintenance of California’s ports.
Most of us take for granted that the
majority of goods we buy have likely
traveled on a ship and passed through
one of California’s 11 ports. In
addition to these imports, my Senate
district is the third largest in the state
for exported goods through the San
Pedro Bay Ports. The locally grown
and manufactured goods are shipped
through these ports to reach the
international markets, which accounts
for roughly 25% of California’s gross
economy.
The economic impact of California’s
ports cannot be overstated. California’s
three largest ports; Los Angeles,
Long Beach, and Oakland have the
cumulative impact of employing
approximately 500,000 statewide
workers and bring in roughly $7
billion in state and local tax revenues,
while facilitating 40% of the nation’s
total maritime trade with a value of
roughly $375 billion. Agriculture
goods from the Central Valley make
up a large part of the total goods that
are exported, and only by maintaining
these trade gateways can we assure
steady increases in the ability of
agricultural goods to be shipped in
a reliable, timely, and cost-effective
manner to overseas markets.
But just as our ports are reaching
this peak success and contributing so
importantly to our economy, several
challenges lie ahead.

The expansion of the Panama Canal,
expected to be complete in 2014,
will mean that no longer will large
cargo ships from Asia have to stop
in California’s ports in order to get
goods in and out of this country. The
Canal expansion opens the door for
port business to be drawn away from
California’s ports to other regions of
the nation who are aggressively looking
to increase their cargo-handling and
pump up their local economies. When
combined with the myriad of often
burdensome state and local regulations
– a topic ripe for a future discussion the Panama Canal expansion has the
potential to make California’s ports
less competitive with Gulf Coast and
East Coast Ports.

these funds, our ports are further
disadvantaged.
While generally taken for granted by
those of us in this region, California’s
ports have a huge impact on our
everyday lives. The feds need to allow
our ports to remain as competitive
as possible by reinvesting these
important tax dollars for their intended
purposes.
State Senator Fuller represents
the 18th Senate District, which
includes Bakersfield, Visalia, Tulare,
Ridgecrest,
Tehachapi,
Mojave,
Taft, Kern River Valley, the Frazier
Mountain communities, and other
portions of Inyo and San Bernardino
Counties.

As a result of these
challenges, I felt it was
important to coauthor SJR
15, a resolution that calls
on the Federal Government
to return to California the
federal port taxes that are
collected from port users
and shippers - and ultimately
consumers. Unfortunately,
the federal government has
not fully utilized the funds
available in the Harbor
Maintenance Trust Fund for
needed maintenance
dredging,
and,
instead, it has
allowed a large
surplus to build up
in the trust fund
in order to mask
the federal deficit
or
fund
other
programs unrelated
to ports. Without

By Bill Gruelich, Public Information Officer, Presidents/ Office
The big news for the college was the
dedication of the new Victor Valley
Regional Public Safety Training Center.
The 41,500 square foot building is
now on line and serving students and
the community. The multi-purpose
facility functions as a training center
for four distinct programs, including
Fire Technology, Administration of
Justice, Emergency Medical Services
and Corrections. The future looks good
for community partnerships that will
potentially benefit the services in which
these students will eventually transfer.
The $31.5 million structure and prop
yard also includes a CERT City that will
be used to train community volunteers
in disaster preparedness scenarios.
The real advantage of this facility will
be its ability to provide cross training/
cooperative real-life training that
involves everyday emergencies. This
unique factor permits VVC students to
take the giant leap from physical training
to actual service duty.
The building features an indoor combat
shooting range, a gun cleaning room,
training simulators, and defensive
tactics/physical training areas for
Administration of Justice Programs.

Indoor Combat Shooting Range
The size of the combat shooting range
is 90’ by 42’ and covered completely
in a bullet proof material which by
design, will partially absorb stray
rounds, eliminate ricochet projectiles,
and facilitate expended rounds down
range to the collection pit. This material
is on the side walls, doors, and ceiling
of the range facility to ensure safety
for shooters. The collection pit spans
the width of the range and holds over
40 tons of rubber fragments along
with coating of fire retardant material
covering a hardened steel backing. The
range was designed as a combat range
and therefore, has no target retrieval
mechanism or shooting booths. This open
floor designed combat shooting range

offers more flexibility in developing
real-life shooting experiences for law
enforcement officers as mobile props
can be placed anywhere on the open
floor area of the range and moved as
necessary.
The range has a state-of-the art air
filtration system, which virtually
removes all expended lead and ancillary
particles from the air through a whole
air flow system which begins at the
rear of the range and flows to the front
ventilation system. This system is
designed to remove any air particles
forward of the shooter and filter out the
ventilation system, reducing exposure
to the shooter.

Gun Cleaning Room
The range is also equipped with an
adjacent gun cleaning room, which
also has a similar vacuum ventilation
system, stainless steel work benches
and gun repair and cleaning equipment.
It also has a range master office, which
houses all weapons and associated
range equipment including: “state of the
art” noise reduction communication ear
phones, accompanying radio and push
to talk microphone. The range master
office also serves as the distribution
center for all equipment to be used
on the range and it houses several
technological devices, i.e., “Milo ShootDon’t Shoot” simulator and the “Super
Trap” targeting system.

Training Simulators
Milo is a 3 “D” projection scenario
program when projected on a screen
in the range, students decide which
course of action to take “shoot or don’t
shoot” based on the circumstances
demonstrated. These scenarios may be
altered by the instructor with a hand-held
control device while adjacent the student.
This flexibility in programming serves
to challenge the student’s analytical and
problem solving skills while offering
a “real life like” exigent circumstance

decision making experience. Scenarios
may be run by the instructor in laser
format with range weapons or in live
fire with the student’s weapon.
The Super Trap targeting system consists
of ten hardened steel (adjustable)
electronically controlled target holders
mounted vertically on the ceiling
adjacent the target trap. These holders
are designed to deflect oncoming
projectiles into the range trap and they
also hold the targets in place. The range
master has the option of pre-loading a
program to turn all or selected targets in
a pre-designed manner to show “good
guy” vs. “bad guy” images by the touch
of a remote controlled button. The
targets have the option of turning 180
or 360 degrees to show either image.
Students then must decide to “shoot or
don’t shoot” based on their observations
and analysis of the target. The Super
Trap target holders are designed to re-set
themselves in the event of a malfunction
caused by an unbalanced target or when
the holder is struck by a projectile. This
technology allows the range master to
continue with the shoot and he/she is
not forced to delay the shoot to repair
or re-set the target device. Super Trap
will also be installing a “Running Man”
horizontal target system, which will run
the width of the range in the range trap
area. This system will allow students
another shooting (target acquisition)
dimensional challenge as the target
moves in the manner a person would
while running from a crime scene. The
range trap area also contains sensors to
evaluate the amount of lead building up
in each area (lanes). The sensor sends
an electronic message to the range
master regarding the condition of the
accumulated lead and recommends
that lane or lanes be shut down and
evacuated.
Additionally, the combat range has two
large doors, which open to the exterior
of the facility and are used for the ingress

of police vehicles for shooting props and
other large movable props. These doors
weigh approximately 1200 pounds
apiece; however, they can be manipulated
quite easily by anyone. The range office
safety windows and exterior windows
(hall way) are made of level #7 glass,
which will withstand several rounds of
high caliber weapon strikes, yet they
are clear for the purposes of auditing
any firearms training in the range. The
range ceiling has several layers of
lighting, which may be dimmed by the
instructor to simulate various lighting
conditions found outside. It also has two
emergency lights on the ceiling near the
rear of the range that may be used to
simulate a law enforcement traffic stop
or emergency situation. The range also
has an intercom system to communicate
with observers not wearing head gear
who may be in the range area. The range
ingress is limited to one door near the
range master office and notwithstanding
the aforementioned exterior doors and
one emergency exit, the only egress is
through the same door near the range
office. This ingress-egress system was
developed to ensure the safety of all
students and equipment.

capabilities in both the range and the
Defensive Tactics/Physical Training
areas.

Defensive Tactics/Physical
Training Area

 Recognized as a Gold LEED facility
by the U.S. Green Building Council’s
Leadership in Energy & Environmental
Design (LEED)

The
Defensive
Tactics/Physical
Training area is approximately 1200
square-foot class room with 14
‘ceilings. The room contains a ceilingmounted projector for the use of the
“Milo System” offering presentations in
use of force decision making scenarios
projected on a wall. This training area
also contains permanent combat mats
with fifty storage “cubbies” for student
clothing and equipment. This area is
also equipped with audio and visual
surveillance equipment recorded in the
center’s computer hard drive for safety
and historical purposes. Adjacent the
training area are two instructor offices,
which have windows for auditing

The complex also includes office
space, classrooms, conference rooms,
four apparatus bays, a fire tower, burn
rooms, a prop yard with a tanker rail car,
an overturned tanker truck, a low angle
rope rescue prop, a collapsed building,
and a confined space/trench prop.

Purpose
The VVCRPSTC offers a state-of-theart facility that facilitates a dynamic,
multi-agency learning environment for
disaster training by incorporating the
following disciplines: Fire Science,
EMT, Paramedics, Administration of
Justice, SWAT and Corrections. Future
plans for the VVCRPSTC include
the development of cooperative and
contract ventures to expand educational
and training opportunities for local
and regional public safety entities,
corporate safety personnel, community
organizations,
and
governmental
agencies.

Positioning California And The High Desert For New Manufacturing Investment
by Jack M. Stewart, President, California Manufacturers & Technology Association

California manufacturing pays the
highest average wages among all sectors
at $71,000, offers the best opportunities
for upward mobility for working
families, and creates an abundance of
local economic growth and activity.
In 2001, manufacturing accounted
for 11.8 percent of the Riverside-San
Bernardino metropolitan statistical
area’s (MSA) workforce. Ten years
later, that percentage has dropped to 7.6
percent.
Unfortunately it’s likely more of a state
issue than a regional issue. California
lost 34 percent of its manufacturing base
over the last decade. The San Bernardino
and Riverside MSA, which contains the
“high desert region”, was not far behind
at 28 percent. Accounting for 620,000
and 33,000 lost manufacturing jobs
respectively, California and the High
Desert region have much to fight for in
any national manufacturing resurgence
or the “re-shoring” of industrial jobs.
Bringing new high wage jobs to
California will not come easy. We must
scrap, wrangle, crusade, lobby, and
contend for vital manufacturing growth.
We must lay out the welcome mat with
policies that allow production facilities
to compete domestically and make
secure long-term investments in capital
and workers.
State policy has a tremendous impact on
manufacturing job growth. States with
a positive business climate (competitive
operating costs, a trained workforce,
and a predictable regulatory climate)
outpace states with negative business
indicators.
California’s 34 percent
manufacturing job loss compares with
Texas at 21 percent, Indiana at 29
percent and Louisiana at 19 percent.
Specifically, there are some bottom-

line issues that must be resolved.
California imposes industrial electricity
rates that are 50 percent higher than
the national average and 95 percent
higher than our competitors in western
states. California is also one of only
three states that taxes the purchase of
manufacturing equipment, and, in 2011,
the state had the fourth highest workers’
compensation premiums.

led by industrial expansion. During the
1950s, 60s, and 70s, California led the
nation in industrial growth, becoming
the top manufacturing state in 1977.
With that growth came a flood of new
tax revenues allowing California to
invest in infrastructure, education,
and new social programs. California
became dependent on the largess of a
robust industrial economy.

Business climate issues have a direct
impact on new investment. From 1977 to
2000, California received 5.6 percent of
the nation’s new and expanded industrial
facilities. Since 2001, California’s share
of those facilities has plummeted to 1.9
percent. Industrial investors plan on a
10 to 15 year time horizon when making
large investments in land, buildings,
and equipment. States with long-term
budget deficits, excessive infrastructure
needs, and aggressive regulatory
agendas seldom make the short list of
corporate planners.

During the ensuing 40 years, California
found pride in implementing “first in
the nation” environmental regulations.
Clean air, land, and water are laudable
goals, but the associated regulatory
costs have had an impact. Four decades
of accelerating environmental activism
have taken a toll on our ability to attract
new investment and jobs.

It’s true that California continues to be
the innovation state – we receive a large
share of venture capital. But in the past
decade, we have lost our ability to both
innovate and manufacture new products
here. From 2005 to 2009, California
received 48 percent of U.S. venture
capital investment, but only 1.3 percent
of U.S. industrial investment.
The current model is to innovate in
California, manufacture in a more costcompetitive state or country, and market
back to California consumers. Under
this scenario, California gets the jobs
advantage of small, start-up research
and development firms, but loses the
enormous jobs benefit when those new
products move to the production stage.

We’re told by financial analysts that
American corporations have $3 to $5
trillion available for investment when
the current recession ends and that more
and more U.S. manufacturers are reshoring their overseas operations. The
question is: will California, as well as the
industrial-dependent high desert region,
attract a fair share of manufacturing
investment, or will investors look
elsewhere for a more favorable business
climate? We must prove California is
serious about rebuilding a manufacturing
economy by acknowledging where we
must make improvements, not resting
on an assumption that this is simply
a national problem with a national
solution. It’s California’s problem to
fix.

California’s modern government grew
up of an era of rapid economic growth

High Desert Assessed Values
By Dan Harp, Assistant Assessor-Recorder
The County Assessor is responsible for
the assessment of all taxable property
within their respective counties, except
for State Board of Equalization assessed
property which includes utility-owned
property and railroad property. The
Assessor’s role involves three main
objectives: (1) discovering and taking
inventory of all taxable property within
the county; (2) determining the taxability
of each item of property; and (3) valuing
and assessing each item of property in
accordance with property tax law.
Proposition
13,
which
was
overwhelmingly approved by California
voters in June 1978, is the basis for
property tax assessment today in
California and all of its 58 counties. Prior
to the passage of Proposition 13, property
taxes could increase dramatically from
year to year based on assessed value of
the property. Proposition 13 limits the
tax rate to 1 percent plus additional rates
necessary to fund local voter-approved
bonded indebtedness. It limits the
property tax increases to a maximum
of 2% per year on properties that did
not undergo a change in ownership nor
had completion of new construction.
Proposition 13 placed explicit limitations
on the power of government to impose
additional property taxes and it requires
real property to be assessed at its
current market value upon a change in
ownership and new construction is to be
reappraised at its current market value
as of its date of completion. Proposition
13 has been amended numerous times
since 1978 resulting in several change
in ownership and new construction
exclusions from reassessment. Some of
the more common exclusions are:
• Reappraisal exclusion for parent/
child transfers - property transferred
between parent and children may be
excluded from reappraisal. A timely
filed claim form is required along
with other statutory requirements and
limitations.

• Reappraisal exclusion for property
owners age 55 and older – property
owners age 55 or older may transfer
their Prop 13 value from their original
principal residence to a replacement
residence if the replacement residence
is of equal or lesser current market
value compared to the original property
and is located in the same county. A
timely filed claim form is required along
with other statutory requirements and
limitations.
• Property acquired or constructed to
replace property destroyed in a disaster
– owners of property that is substantially
damaged or destroyed by a Governordeclared disaster may transfer the Prop
13 value of the damaged property to a
comparable replacement property within
the same county. A timely filed claim
is required along with other statutory
requirement and limitations.
• Exclusions from market value
assessment as a result of new construction
include the following: addition of an
active solar energy system, additions
of fire sprinkler systems, seismic
retrofitting and earthquake hazard
mitigation features applied to existing
buildings, and modifications to make
an existing residence or structure more
accessible to a severely and permanently
disabled person.
When Proposition 13 was originally
enacted in 1978, it did not provide
the Assessor the ability to reduce
assessments resulting from a decline in
market value if the property was owned
by the same taxpayer. California real
estate was appreciating at record levels
in the late 1970s so the drafters of
Proposition 13 did not have the foresight
or envision a need to allow Assessors
the ability to reduce assessments
resulting from economic conditions,
depreciation, damage, obsolescence,

or other factors causing a decline in
value. Proposition 8 was approved
by the voters in November 1978 to
remedy this oversight in Proposition 13.
Proposition 8 allows the Assessor to
make reductions to assessed values when
property has been damaged or its value
has been reduced by other factors such
as economic conditions. The Assessor
can recognize declines in value if the
market value of the property on lien date
(January 1st) falls below its Proposition
13 value or stated otherwise, the correct
value to be enrolled in any year is the
lower of a property’s Proposition 13
value or its current market value. For
example, if the current market value of
one’s home on January 1st is $125,000
and its corresponding Proposition 13
value is $174,556, the assessed value for
that particular assessment year should
be reduced to the current market value
of $125,000. It is important to note that
a property owner may lose a substantial
amount of equity in the property because
of a declining real estate market but that
does not necessarily mean the assessed
value is incorrect. For example, the
current market value of one’s home
on January 1, 2007 is $360,000 and its
current market value on January 1, 2012
is $150,000. The owners purchased the
property in 1998 and their January 1,
2012 Proposition 13 value is $110,556.
Even though the property owner has lost
$210,000 in equity, its assessed value
is still correct because the Proposition
13 value of $110,556 is less than the
January 1, 2012 current market value of
$150,000.
During the mid- 2000s, San Bernardino
County experienced unprecedented
appreciation in real estate prices in all
areas of the county, which resulted
in double-digit increases to the
assessment roll for years 2004 through
2007. The 5 High Desert cities and
adjoining unincorporated areas showed

falls below its Proposition 13 value or stated otherwise, the correct value to be enrolled in any year is
the lower of a property’s Proposition 13 value or its current market value. For example, if the current
market value of one’s home on January 1st is $125,000 and its corresponding Proposition 13 value is
$174,556, the assessed value for that particular assessment year should be reduced to the current
market value of $125,000. It is important to note that a property owner may lose a substantial amount
of equity in the property because of a declining real estate market but that does not necessarily mean
the assessed value is incorrect. For example, the current market value of one’s home on January 1,
2007 is $360,000 and its current market value on January 1, 2012 is $150,000. The owners purchased
the property in 1998 and their January 1, 2012 Proposition 13 value is $110,556. Even though the
property owner has lost $210,000 in equity, its assessed value is still correct because the Proposition 13
value of $110,556 is less than the January 1, 2012 current market value of $150,000.
During the mid‐ 2000s, San Bernardino County experienced unprecedented appreciation in real estate
prices in all areas of the County which resulted in double‐digit increases to the assessment roll for years
2004 through 2007. The 5 High Desert cities and adjoining unincorporated areas showed a particularly
robust increase in their assessed values for years 2004 through 2007 then stabilizing in 2008. The peak
of the real estate market in San Bernardino County occurred in 2007, stabilized in 2008 and then began
its steep decline. During the late 2000s, the 5 High Desert cities and adjoining unincorporated areas
were especially hard hit with decline of real estate values and substantial decreases to the assessment
roll.

High Desert Assessed Values
Continued

a particularly robust increase in their
assessed values for years 2004 through
2007 then stabilizing in 2008. The
peak of the real estate market in San
Bernardino County occurred in 2007,
stabilized in 2008 and then began its
steep decline. During the late 2000s,

assessment roll for 2008 through 2011
is $27.3 billion.

revenue collected on the basic 1% tax
rate is used to support local schools,
cities, special districts, the county, and
redevelopment agencies (dissolved as of
2-1-2012). As one can imagine, when
assessed values are increasing property
tax revenue supporting schools, cities,
county, etc. are increasing. Conversely,
when assessed values are decreasing
property tax revenue to schools and
local government is reduced, which is
the current situation in San Bernardino
County and the State of California.

Macy’s Is Coming To The Mall Of Victor Valley
Located in one of the fastest growing
areas in California, The Mall of Victor
Valley is the dominant regional mall
in Southern California’s High Desert
region. A strong anchor and in-line
retailer mix attracts customers who
would otherwise have to drive at least
30 miles (through the Cajon Pass, a
significant geographic barrier) to find
similar, quality shopping. It is also the
only regional mall within the 220 miles
that separates San Bernardino from Las
Vegas.
With numerous manufacturing and
distribution facilities drawn by the area’s
low land costs and superb accessibility,
the High Desert region has enjoyed a
boom in industrial development. In order
for The Mall of Victor Valley to maintain
its appeal to the growing population
and ever changing environment, a new
refined look was needed.
In 2007, The Mall of Victor Valley
went through an exciting transformation
in which a full interior remodel was
launched to better serve this Southern
California community. The 10-month
renovation project delivered a fresh
look with new flooring and tile, a paint
palette complementing the majestic High
Desert region, and updated aesthetics
such as lighting and new modern ceiling
treatments. The mall will continue to
expand its desirable offerings in 2012
and 2013 with the addition of Macy’s,
a new expanded JC Penney and plans
for many more new to market national
retailers.

many of the store’s popular celebrity
lines.The iconic department store
remains one of America’s top retailers,
with a focus on innovation in localizing
its merchandise and connecting with
customers. “We are looking forward
to serving High Desert customers with
the localized assortments, distinctive
fashion, obvious value, and exciting
shopping experience for which Macy’s
is known,” said Ron Klein, Chief Stores
Officer, Macy’s. “We are making plans
for getting to know this community
and the customers served by this well
positioned shopping center.”
The Mall of Victor Valley officially
announced the expansion and relocation
of jcpenneyon February 6, 2012. As one
of nations’ best retailers, jcpenneyis reimagining every aspect of its business in
order to reclaim its birthright and become
America’s favorite store. The company
is currently transforming the way it does
business and remaking the customer
experience across its 1,100 department
stores and on jcp.com. The effort is
spearheaded by Straightforward Fair and

Square Pricing, month-long promotions
that are in sync with the rhythm of their
customers lives, exceptionally curated
merchandise, artful presentation, and
unmatched customer service.
The
expanded store at The Mall of Victor
Valley is set to open in October 2012,
expanding into a 92,672 square f00t,
single story, full-line department store,
approximately twice the size of the
current jcpenney.
A loyal consumer base, coupled with
the center’s position as the dominant
retail hub in the High Desert, places
The Mall of Victor Valley in a unique
position to leverage this development
into additional remerchandising success.
The improvements to the merchant mix,
curb appeal enhancements, and addition
of strong anchors promise to create a
real estate and community asset that will
continue to grow with the market for
years to come. For more information and
future updates about the project please
visit us at TheMallofVictorValley.com.

On November 10, 2011 The Mall of
Victor Valley officially announced
Macy’s to take the place of 72,000
square-foot
former
Gottschalks
department store building. With a
planned opening in spring of 2013 the
new 103,008 square foot, single story,
full-line department store will feature
The Bradco High Desert Report
760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com

23

High Desert Report
A quarterly economic overview

No More Redevelopment...What’s Next?

By Larry J Kosmont, President & CEO of Kosmont Companies
Successor Agencies have assumed
control and will be responsible for the
winding down of the activities and assets
of former Redevelopment Agencies under
the supervision of Oversight Boards,
which are currently being assembled.
Following audits by Counties and
the State of previous redevelopment
transactions and ongoing Successor
Agency obligations, properties of the
former Redevelopment Agencies will
begin to come onto the market. Cities
are now handicapped with respect to
future economic development without
the capacity for tax increment financing.
New and relatively untried tools such
as infrastructure financing districts
and
community-based
economic
development authorities will be explored
and implemented as a replacement for
redevelopment, while existing tools,
such as lease/lease-back financing and
sales tax reimbursement agreements
will concurrently be revisited. Several
redevelopment legislation clean-up
measures are underway to provide
guidance and options to cities in
California, but filling the void left by
redevelopment will still be a formidable
task.

Where We Are
Redevelopment is dead, and effective
February 1, 2012 the dissolution process
has begun. Though it is procedurally
untried, the unwinding process is vaguely
similar to certain aspects of private sector
liquidation in that, by and large, the new
decision makers (Oversight Boards)
will act much like creditor committees,
seeking to liquidate assets in order to
share in the sale proceeds in addition to
getting public agency-owned properties
back on the tax rolls.Due to the unique
and untested requirements and processes
in AB1X 26, Successor Agencies (the
cities that formerly had redevelopment
properties) and private sector entities
that took part in the program or may
want to buy those properties are focused

on several key questions going forward,
regarding such issues as the next steps
in redevelopment dissolution, the
availability of properties going forward,
the feasibility of redevelopment without
tax-increment financing, replacement
economic development tools, and
potential redevelopment legislation
clean-up.

What’s Next?
 Successor Agencies have already
made the decision to remain in control of
the redevelopment dissolution program.
Almost every city in the state elected
to become a Successor Agency to its
redevelopment agency, enabling them
to finish ongoing projects and dispose
of assets with the express review and
approval of Oversight Boards.

Colleges (one), and one member
representing employees of the former
agency.
 Successor Agencies have adopted
their Enforceable Obligation Payment
Schedules (“EOPS”) in January 2012.
Audits and reviews of former agency
transactions are now underway by the
Department of Finance and the county
auditor-controllers to scrutinize the
EOPS and Recognized Obligation
Payment Schedules (“ROPS”) and
importantly, to set up the liquidation of
former agency assets, including notes
and properties.

Will Properties Become
Available? If So, When?

Properties will become available. Timing
 Seven-member Oversight Boards is unclear. The Successor Agency EOPS
will be formed over the next two months must be ratified by the county auditor(deadline is May 1, 2012), to oversee the controller, State Controller’s Office, and
winding down of redevelopment assets Department of Finance. The primary
and activities. For the most part, careful assets referenced on EOPS require
attention and emphasis is being put into
continued on page 24
the selection of board
members, as these are
the individuals who will
decide what happens to
former agency assets
(though decisions can
be appealed to the State
Department of Finance
and/or State Controller’s
Office).
Oversight
Board members are
appointed by county
board of supervisors
(two), the city mayor
Mojave Water Agency is
(one), the largest special
district by property
tax share within the
jurisdiction of the
former agency (one),
county superintendent
of education (one),
Chancellor of the
California Community
www.mojavewater.org

ongoing payments (e.g. bond payments).
Concurrently, real estate assets are being
placed on lists by Successor Agencies
to be disposed of “expeditiously and
in a manner aimed at maximizing
value” subject to the direction of
the Oversight Boards as outlined in
AB1X 26. Successor Agencies are
currently evaluating preferred methods
of disposition, initiating assessments
of value, and formulating strategies to
be recommended to Oversight Boards,
once they are formed (by May 1, 2012).

Can Cities Accomplish Economic
Development Without Tax
Increment Financing (“TIF”)?
Terminating redevelopment essentially
eliminated TIF in California. As a
result cities have lost their primary
leverageble revenue source for
economic
development
projects.
California is now one of only two states
in the nation without some form of
this valuable financing instrument. TIF
enables public agencies cities to freeze
property and other tax revenues, such
that additional increment can become
available to match or enhance private
sector equity/debt investment. Without
this tool, California cities are limited in
ways to assist public-private projects
and pay for infrastructure.

New & Untried Economic
Development Tools
In the next year, there will be a
prevalent debate about which tools
should be authorized as a replacement
for redevelopment. Most alternatives
will involve the reintroduction of taxincrement at some level:
 Infrastructure Financing Districts
(“IFD”), which divert property tax
revenues for public infrastructure
improvement
projects
(highways,
transit, water, sewer, parks, etc.). The
current IFD statute requires approval
by all effected taxing authorities and a
vote by all constituent parties. As such,

the process is too cumbersome and not
workable.
 Community-Based
Economic
Development Authorities – some
charter cities have had such authorities
in place, such as the City of Placentia
(a Kosmont client), where the Industrial
Commercial Development Authority
was established in 1982. The City of
Alhambra is a charter city that is leading
the way by adopting an economic
development ordinance that empowers
the City to acquire or lease property,
provide for site preparation work,
accept financial assistance from public
and private sources, provide financial
assistance to projects, issue debt, and
other essential economic development
activities. Other charter and general law
cities in California must decide whether
to pursue similar actions. Ideally
incorporated into any such model
would be broadened surplus property
disposition, ability of general law cities
to create TIF-based reimbursement
agreements, and capacity for cities to
sell property below market to encourage
private investment and job creation.
Existing Economic Development
Tools Are Being Revisited (partial
list):
 Lease / Lease-Back Financing
 With and without General Fund
guarantees
 Site specific tax revenue pledges
for hotels and retail
 Ground Leases
 Sales
Tax
Reimbursement
Agreements
 Operating Covenants (e.g. for
Retailers and Auto Dealers)
Clean-Up Legislation in Process (As
of March 2012)
 SB 654 (Steinberg) – Various
Redevelopment Clean-Up
 Currently at Assembly Desk
 Would allow for L/M Income
Housing Fund to transfer to Successor
Housing Agency

San Bernardino Associated Governments
(SANBAG) is the Council of
sociated Governments
Governments and transportation agency
Update
for San Bernardino County. SANBAG
AG) is the Council of Governments and transportation agency for San
is responsible for cooperative regional
ooperative regional planning and furthering an efficient multi‐modal
planning and furthering an efficient multives the 2.1 million residents of San Bernardino County.
modal transportation system countywide.
BAG supports freeway construction projects, regional and local road
SANBAG serves the 2.1 million residents
lroad crossings, call boxes, ridesharing, air quality and congestion
udies. SANBAG administers Measure I, the half‐cent transportation
of San Bernardino County.

n 1989 and reapproved in 2004 to extend from 2010‐2040.

As
the
County
Transportation
Commission,
SANBAG
supports
freeway construction projects, regional
and local road improvements, train and
bus transportation, railroad crossings,
e City of Victorville, County of San Bernardino, SANBAG, and Caltrans
e 15 ‐ La Mesa/Nisqualli Interchange with a bang in front of a crowd
call boxes, ridesharing, air quality and
congestion management efforts, and
ge will provide a new east/west cross‐over point for local traffic, as
long-term planning studies. SANBAG
ey road to the south and Palmdale Road to the north. This significant
ructure will ultimately ease congestion, improve local circulation and
administers Measure I, the half-cent
15 in that area.
transportation sales tax originally
2. Since then, significant progress has been made on the Oro Grande
approved by county voters in 1989 and
ow for construction of the eastern bridge abutment; and, utilities
reapproved in 2004 to extend from 2010o make room for the new interchange configuration. Information
SANBAG website (www.sanbag.ca.gov) and ongoing outreach to the
2040.
ut the construction period. Individuals interested in getting email

the entire county, with focused attention provided by specialized
rt Committee. Following is a summary of some of the projects being

SANBAG considers the transportation
1 | P afocused
ge
needs of the entire county, with
attention provided by specialized
committees, one of which is the Mountain
Desert Committee. Following is a
summary of some of the projects being
planned for the High Desert.

dule changes, traffic handling, and detour plans, can sign up from the

La Mesa/Nisqualli Road Interchange

25

High Desert Report

Interchange with a bang in front of a
crowd of nearly 200.
The Interstate 15 - La Mesa/Nisqualli
Interchange will provide a new east/west
cross-over point for local traffic, as well
as a freeway access alternative to Bear
Valley road to the south and Palmdale
Road to the north. This significant
addition to the Victorville transportation
infrastructure will ultimately ease
congestion, improve local circulation,
and enhance overall safety in and around
Interstate 15 in that area.
The contractor began work on February
13, 2012. Since then, significant progress
has been made on the Oro Grande Wash;
Mariposa Road has been realigned to
allow for construction of the eastern
bridge abutment; and utilities (both
private and public) have been relocated
to make room for the new interchange
configuration.
Information updates
about the project are available on the
SANBAG website (www.sanbag.ca.gov)
and ongoing outreach to the community
of Victorville will continue throughout
the construction period. Individuals
interested in getting email alerts about
the project, which will include schedule
changes, traffic handling, and detour
plans can sign up from the project page
on the web.

After decades of development, officials
from
the City of Victorville, County
project page on the web.
(Maps below) These two aerial
of(Maps below)These two aerial perspectives show the complexity of the I‐15/La Mesa‐Nisqualli Interchange. Adjacent
San Bernardino, SANBAG, and
perspectives show the complexity of
access roads on both sides of the freeway will be moved out away from the freeway ramps to disperse traffic and
Caltrans
kicked off the construction of
provide greater safety.
continued on page 26
the new Interstate 15 - La Mesa/Nisqualli

Plan would require Oversight Board
& DOF approval
 SB 1156 (Steinberg) – Community
Development and Housing Joint
Powers Authority
 With Senate Committee on
Transportation & Housing(hearing
scheduled for April 10, 2012)
 Authorizes Cities/Counties to
form “Community Development and
Housing Joint Powers Authorities”
to assume from Successor Agencies
the responsibility for managing the
assets and property of the former
redevelopment agency
 Authorizes these entities to
exercise specified powers included in
the RDA law and to exercise certain
other powers relating to financing its
activities such as establish additional
sales tax
Economic Development – A New
Wave is Coming
As the burden of redevelopment
dissolution and the roles and
responsibilities of the various successor
entities become clear, it is also becoming
evident that there is significant room
for differentiation in how cities cope
and position themselves for future
economic development efforts. Cities
should be assertive in their pursuit
of asset strategies, starting with full
consideration of an upgraded and updated
economic development strategy. Now,
more than ever, local governments will
need to be creative in their exploration
and implementation of economic
incentives and public financing tools for
economic development projects. While
redevelopment was the most widely
used revenue-financing tool, it was in
fact just one tool in the toolbox at the
disposal of California cities.
More to come, so stay tuned!

Alternative 3A was identified in the
approved documents as the selected
design which best meets the needs and
purpose of the project and is supported
by the community of Devore. The next
High Desert Corridor
Click on this link for more High Desert steps on the project include: contacting
Corridor information: http://www.metro. affected tenants, as well as property
The High Desert Corridor (HDC) is
owners; select a Design-Builder in
net/projects/high-desert-corridor/
a proposed new 63-mile east-west
Fall 2012; begin Design at the end of
freight and vehicle expressway. The 50
High Desert Corridor Project 2012; conduct a public meeting prior to
High Desert Corridor Project Alternatives Map:
miles from Palmdale to Victorville is a
Alternatives Map:
construction; and commence construction
There are several alternative routes still being considered, as indicated below by the various colors.
High Desert Corridor Project Alternatives Map:
proposed Public-Private Partnership (P3)
activity in early
that would also connect regional railThere are several alternative routes still being considered, as indicated below by the various c
2013.
This
systems linking Los Angeles County to
is a DesignSan Bernardino County and beyond. The
Build project,
corridor bypasses much of the L.A. basin,
w h e r e b y
speeding and diverting freight traffic from
design
and
the ports and stimulating export business
c
o
n
s
t
r
u
c
t
i
on
expansion. The HDC will address traffic
will be done
safety and support the growing need to There are several alternative routes still simultaneously by the same contractor.
move goods through Southern California. I‐15/I‐215 Devore Junction Goods Movement Improvement Project
being considered, as indicated below by In
July
2010,
the
California
The HDC Joint Powers Authority (JPA)
the various
shades.
Transportation
Commission
(CTC)
is a partnership among both counties, LA
selected
the
I-15/I-215
Devore
Junction
Environmental Document Approved
Metro, SANBAG, and all cities along the I-15/I-215 Devore Junction Goods
Goods Movement Improvement Project
Movement
Improvement
Project
route.
I‐15/I‐215 Devore Junction Goods Movement Improvement Project
The Environmental Document for the Devore project was approved o
as one of 10 road construction projects
February 29, 2012, thus allowing the project to move forward with
The High Desert Corridor (HDC)
statewide that Caltrans can construct
discussions about acquisition of property. Design Alternative 3A was
project planning involves the California
using the streamlined project delivery
DEVORE
identified in the approved documents as the selected design which b
Department of Transportation (Caltrans)
Environmental Document Approved
method design-build. This can save time
Junction
meets the needs and purpose of the project and is supported by the
in coordination with the Los Angeles
and allows for adaptations throughout
community of Devore. The next steps on the project include: contac
County Metropolitan Transportation
The Environmental Document for the Devore pr
the construction process.
affected tenants, as well as property owners; select a Design‐Builder
Authority (Metro), the High Desert
February 29, 2012, thus allowing the project to m
Fall 2012; begin Design at the end of 2012; conduct a public meeting
The I-15/I-215 Devore Junction is the
Corridor Joint Powers Authority, and
prior to construction; and commence construction activity in early 20
discussions about acquisition of property. Desig
worst grade-related trucking bottleneck
other partner agencies, including the City This is a Design‐Build project, whereby design and construction will be done simultaneously by the same contract
DEVORE
identified in the approved documents as the sel
on I-15 in San Bernardino County.
of Victorville, the Town of Apple Valley,
Junction
Originally
constructed
in 1969,
meets the needs and purpose of the project and
In
July
2010,
the
California
Transportation
Commission
(CTC) selected
the I‐15/I‐215
Devore the
Junction Go
San Bernardino County, Caltrans District
junction
currently
handles
an
average
of
Movement Improvement Project as one of 10 road construction projects statewide that Caltrans can construct u
community of Devore. The next steps on the pr
8, and SANBAG. In 2010, Caltrans
the streamlined project delivery method design‐build. This can save time and allows for adaptations throughout
160,000
vehicles
a
day,
including
about
took over as lead agency from the City
affected tenants, as well as property owners; se
construction process.
21,000 heavy trucks.
of Victorville.
Fall 2012; begin Design at the end of 2012; cond
This project will benefit freight traffic,
The HDC east-west freeway/expressway The I‐15/I‐215 Devore Junction is the worst grade‐related trucking bottleneck on I‐15 in San Bernardino County.
prior to construction; and commence constructi
Originally constructed in 1969, the junction currently handles an average of 160,000 vehicles a day, including abou
recreational travelers, and High Desert
is likely to be a toll facility and mayThis is a Design‐Build project, whereby design and construction will be done simultaneously b
21,000 heavy trucks.
commuters. It is anticipated that an
also accommodate rail, between State
Environmental Document Approved
improved Devore Junction will spur
Route 14 in Los Angeles County andIn July
This project will benefit freight traffic, recreational travelers, and High Desert commuters. It is anticipated that an
2010, the California Transportation Commission (CTC) selected the I‐15/I‐215
economic growth and improve the
The
Environmental
Document
for
improved Devore Junction will spur economic growth and improve the quality of life for all Southern California
State Route 18 in San BernardinoMovement Improvement Project as one of 10 road construction projects statewide that Cal
the Devore project was approved on quality of life for all Southern California
County. The High Desert Corridor was motorists traveling to the High Desert, Las Vegas, and beyond.
the streamlined project delivery method design‐build. This can save time and allows for ad
February 29, 2012, thus allowing the motorists traveling to the High Desert,
identified as the E-220 and designated This project will improve traffic flow at the I‐15/I‐215 Devore Junction and includes reconnecting the historic Rout
project to move forward with discussions Las Vegas, and beyond.
construction process.
as a High Priority Corridor on the 66 that currently dead‐ends on both sides of the junction. The project’s total cost estimate of $324 million for the
about acquisition of property. Design This project will improve traffic flow
National Highway System. The project locally‐preferred alternative includes 15 bridges, roadbed widening on two Interstates, improvements to local
The I‐15/I‐215 Devore Junction is the worst grade‐related trucking bottleneck on I‐15 in San B
continued on page 27
arterials, environmental mitigation, and major drainage improvement.
The Bradco High Desert Report
Originally constructed in 1969, the junction currently handles an average of 160,000 vehicles
760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com
21,000 heavy trucks.
the I-15/La Mesa-Nisqualli Interchange.
Adjacent access roads on both sides of
the freeway will be moved out away from
the freeway ramps to disperse traffic and
provide greater safety.

is proposed as a means of improving
mobility and access for people and goods
in the rapidly growing Antelope, Apple,
and Victor Valley areas of Los Angeles
and San Bernardino Counties.

bridge project but is also working with Road Overcrossing and approximately
the City of Victorville and the County of 1.42 miles from the existing US-395
San Bernardino to complete the Yucca Connection Overcrossing. The Ranchero
Loma Corridor to connect the bridge Road Interchange will include the
with Hesperia Road and the planned I-15/ construction of ramps for full freeway
La Mesa-Nisqualli Interchange. Starting access, and construction of a new
at the corridor’s east end, the bridge will overcrossing structure at the I-15 freeway
connect Yucca Loma Road to Yates to provide east/west connections. The
Road, which will then connect to Hesperia project will also realign the frontage
Road via a new grade separation/bridge roads—Caliente Road and Mariposa
over the Burlington Northern Santa Fe Road—on either side of the freeway.
Yucca Loma Bridge and the Yucca
railroad tracks, all of which will provide Construction is scheduled to begin in fall
Loma Corridor
Yucca Loma Bridge and the Yucca Loma Corridor
easy Ranchero Road Interchange
access to Interstate 15 using the new 2012 with SANBAG as the lead agency.
interchange
at La Mesa/Nisqualli Road.
The proposed Ranchero Road Interchange at
The Town of Apple Valley has hired
a construction management firm and
Interstate 15 is located in the City of Hesperia,
The Town of Apple Valley has hired a construction management firm and construction is expected to begin in late
This approximately 1.78 miles north of the existing Oak
project will create an alternate east/
construction is expected to begin in late
summer 2012 on the Yucca Loma Bridge project over the Mojave River. The Yucca Loma Bridge will connect Yucca
west
corridor
that will provide congestion
Hills Road Overcrossing and approximately 1.42 miles
summer 2012 on the Yucca Loma Bridge
Loma Road on the Apple Valley side with Yates Road on the Victorville side. The new roadway and bridge will carry
from the existing US‐395 Connection Overcrossing.
relief
for
the
I-15 Interchanges at Bear
project over the Mojave River. The
vehicles, bicyclists and pedestrians. It will also intersect the City of Victorville’s proposed Riverwalk
The Ranchero Road Interchange will include the
Valley
Road
and
Palmdale Road, as well
bicycle/pedestrian project, providing an alternative means of transportation along the river towards Bear Valley Road
construction of ramps for full freeway access, and
Yucca Loma Bridge will connect Yucca
as State
Route 18 at D Street in Victorville.
construction of a new overcrossing structure at the I‐
and Victor Valley College.
Loma Road on the Apple Valley side
15 freeway to provide east/west connections. The
In addition,
the Yucca Loma Bridge will
with Yates Road on the Victorville side.
project will also realign the frontage roads—Caliente
Apple Valley is the lead agency on the bridge project but is also working with the City of Victorville and the County of
provide
the
Town of Apple Valley with
The new roadway and bridge will carry
Road and Mariposa Road—on either side of the
San Bernardino to complete the Yucca Loma Corridor to connect the bridge with Hesperia Road and the planned I‐
another
crossing over the Mojave River
freeway. Construction is scheduled to begin in fall
vehicles, bicyclists, and pedestrians. It
15/La Mesa‐Nisqualli Interchange. Starting at the corridor’s east end, the bridge will
connect Yucca Loma Road to
and
connect
the urban/commercial
cores
US-395 widening
2012 with SANBAG as the lead agency.
will also intersect the City of Victorville’s
Yates Road, which will then connect to Hesperia Road via a new grade separation/bridge over the Burlington
of
Victorville
and
Apple
Valley.
proposed Riverwalk bicycle/pedestrian
SANBAG is working with CALTRANS
Northern Santa Fe railroad tracks, all of which will provide easy access to Interstate 15 using the new interchange at
US‐395 widening
project, providing an alternative means
Ranchero Road Interchange
on the design for the widening project.
La Mesa/Nisqualli Road.
SANBAG is working with CALTRANS on the design for the widening project. The first phases of the project to be
of transportation along the river towards
widened will be north of SR18. This project will widen US‐395 from Interstate 15 through Desert Flower Road in
The
proposed
Ranchero
Road The first phases of the project to be
This project will create an alternate east/west corridor that will provide congestion relief for the I‐15
Adelanto, from two to four lanes, with left‐turn pockets and standard shoulders. This project will also widen or
Bear Valley Road and Victor Valley
Interchange
at Interstate 15 is located widened will be north of SR18. This
replace the structure over the California Aqueduct. The environmental document was completed in December 2009
Interchanges at Bear Valley Road and Palmdale Road, as well as State Route 18 at D Street in Victorville. In
College.
in the
City of Hesperia, approximately project will widen US-395 from Interstate
and is in the design phase. The 12.5 miles of the project will be constructed in nine phases as funding is identified.
addition, the Yucca Loma Bridge will provide the Town of Apple Valley with another crossing over the
Construction is anticipated to begin in 2013‐2014.
Apple Valley is the lead agency on the
1.78 miles north of the existing Oak Hills 15 through Desert Flower Road in
Mojave River and connect the urban/commercial cores of Victorville and Apple Valley.
Adelanto, from two to four lanes, with
Victor Valley Transit Authority left-turn pockets and standard shoulders.
The Victor Valley Transit Authority (VVTA) is one of six transit agencies that SANBAG supports countywide and
This project will also widen or replace the
provides local bus service for the communities of Adelanto, Apple Valley, Hesperia, Victorville, and unincorporated
structure over the California Aqueduct.
areas of the Victor Valley.
The environmental document was
The VVTA has completed construction of its new Victor Valley Transit Facility in Victorville. The new transit facility
completed in December 2009 and is in
includes a 27,000 square feet administration and operations building, a 31,000 square feet bus maintenance building,
the design phase. The 12.5 miles of the
a bus parking lot to accommodate 120 buses and paratransit vehicles, 230 parking spaces for employees, visitors and
project will be constructed in nine phases
service vehicles, a 13,000 square feet bus wash structure and fueling station, and a photovoltaic panel covered bus
shade structure. The facility was designed and constructed to achieve the highest feasible rating as established under
as funding is identified. Construction is
the standards of the Leadership in Energy and Environmental Design (“LEED”).”
anticipated to begin in 2013-2014.
at the I-15/I-215 Devore Junction and
includes reconnecting the historic Route
66 that currently dead-ends on both sides
of the junction. The project’s total cost
estimate of $324 million for the locallypreferred alternative includes 15 bridges,
roadbed widening on two interstates,
improvements to local arterials,
environmental mitigation, and major
drainage improvement.

VVTA will be having a dedication ceremony for the new transit
Victor Valley Transit Authority
facility on Friday, April 20, 2012 at 11:00 am, following the
The Victor Valley Transit Authority
Mountain Desert Committee Meeting at this location. The public
is invited.
(VVTA) is one of six transit agencies
that SANBAG supports countywide

and provides local bus service
The Yucca Loma Corridor begins at the I‐15/ LaMesa‐Nisqualli Interchange in Victorville and extends east to the Yucca
The Yucca Loma Corridor begins at the I-15/ LaMesa-Nisqualli Interchange in Victorville
communities of Adelanto, Apple
Loma Bridge in Apple Valley, creating a new much‐needed east‐west corridor for the Victor Valley.
and extends east to the Yucca Loma Bridge in Apple Valley, creating a new much-needed

east-west corridor for the Victor Valley.

for the
Valley,
Hesperia, Victorville, and unincorporated
areas of the Victor Valley.
5 | P a g e

The proposed Ranchero Road Interchange at
Interstate 15 is located in the City of Hesperia,
A quarterly economic overview
approximately 1.78 miles north of the existing Oak
Publishers Message
SANBAG/San Bernardino Associated Governments
Hills Road Overcrossing and approximately 1.42 miles
Continued
High Desert
Transportation Update
from the existing US‐395 Connection Overcrossing.
Continued
The Ranchero Road Interchange will include the
existing at-grade crossing. These delays (Los Angeles County, Orange County,
The VVTA has completed construction
construction of ramps for full freeway access, and
of its new Victor Valley Transit
affect the traveling public, potentially Riverside County and San Bernardino
construction of a new overcrossing structure at the I‐ County) Inland Empire, we have nearly
Facility in Victorville. The new transit
hinder access by emergency vehicles,
15 freeway to provide east/west connections. The
facility includes a 27,000 square
and increase air pollution by vehicle 1.94 billion square feet of industrial
project will also realign the frontage roads—Caliente
feet administration and operations
emissions when vehicles are stopped space. While the Inland Empire, with
nearly 440,000,000 square feet of
Road and Mariposa Road—on either side of the
building, a 31,000 square feet
bus
and idling while waiting for the trains at
space represents 4% of all total space
maintenance building, a bus freeway. Construction is scheduled to begin in fall
parking
crossings. The high train traffic volumes nationally, 20% of the absorption
lot to accommodate 120 buses
and
affect the mobility, accessibility, nationally in 2011 occurred in the Inland
2012 with SANBAG as the lead agency.
paratransit vehicles, 230 parking spaces
and reliability of emergency service Empire. We are latterly the epic center
for employees, visitors and service
providers requiring access between for industrial activity (please see Ronald
US‐395 widening
J. Barbieri, Ph.D., CPA’s commentary
vehicles, a 13,000 square feet bus wash
areas on either side of the tracks.
on industrial activity).
structure and fueling station,SANBAG is working with CALTRANS on the design for the widening project. The first phases of the p
and a
The primary project objective is to
photovoltaic panel covered bus
shade
widened will be north of SR18. This project will widen US‐395 from Interstate 15 through Desert Flow
improve operation and safety by Lastly, but something that we need to
structure. The facility was designed
ensuring prompt emergency response deal with and will eventually go away
Adelanto, from two to four lanes, with left‐turn pockets and standard shoulders. This project will als
and constructed to achieve the highest
time to businesses and residents are the 370,960 mortgages out of nearly
replace the structure over the California Aqueduct. The environmental document was completed in
feasible rating as established under
the
while eliminating the hazards and 849,136 mortgages within the Inland
standards of the Leadership inand is in the design phase. The 12.5 miles of the project will be constructed in nine phases as funding
Energy
inefficiencies of trains passing through Empire, representing 43.7% of the
Construction is anticipated to begin in 2013‐2014.
and Environmental Design (“LEED”).
the flow of vehicular traffic. Air quality mortgages that are currently “under
VVTA had a dedication ceremony
for
will be improved through elimination of water” in the way of equity and value.
the new transit facility on Friday,
April
vehicles idling during gate downtimes.
Victor Valley Transit Authority
We have noticed a considerable increase
20, 2012 at 11:00 am, following the
It is anticipated that construction will in leasing and sales activity in the High
The Victor Valley Transit Authority (VVTA) is one of six transit agencies that SANBAG supports county
Mountain Desert Committee Meeting at
Desert region. We hope you enjoy our
begin in late 2012.
provides local bus service for the communities of Adelanto, Apple Valley, Hesperia, Victorville, and u
50th edition. We are extremely humbled
this location. The public was invited.
areas of the Victor Valley.
and proud that we have completed
Lenwood Grade Separation, Barstow
this monumental publication. I would
be remiss if I did not thank my idol
The City of Barstow initiated this project
The VVTA has completed construction of its new Victor Valley Transit Facility in Victorville. The new t
and a gentlemen that I call my second
in response to proposed commercial
includes a 27,000 square feet administration and operations building, a 31,000 square feet bus main
father “Dr. Alfred Gobar”, Chairman
and industrial development in the area.
Emeritus of Alfred Gobar Associates
a bus parking lot to accommodate 120 buses and paratransit vehicles, 230 parking spaces for employ
Currently, Lenwood Road has two
lanes
Anaheim. I originally went to Dr. Gobar
of traffic in each direction. Lenwood
service vehicles, a 13,000 square feet bus wash structure and fueling station, and a photovoltaic pan
seeking advice in late 1992. During the
Road presently carries approximately
shade structure. The facility was designed and constructed to achieve the highest feasible rating as es
discussion I asked him if he had ever
4,200 vehicles per day, many of
which
produced a newsletter and he informed
the standards of the Leadership in Energy and Environmental Design (“LEED”).”
are trucks. Lenwood Road
me that he had been co-editor of many.
serves commercial, light
Dr. Al, I can’t thank you enough and I
VVTA will be having a dedication ceremony for th
industrial, and residential
am humbled to call you one of my close
facility on Friday, April 20, 2012 at 11:00 am, follo
friends. Thank you.
developments in the vicinity
of the BNSF grade crossing.
Mountain Desert Committee Meeting at this loca
Lastly, and most importantly, if you
is invited.
Lenwood Road serves as a
wish to continue to receive a copy
major access route from local
of the Bradco High Desert Report,
residents and businesses to
any statistical reports, op-ed articles
that we post to our website for free,
Interstate 15.
Increasing
please register at our website at www.
vehicular traffic due to
thebradcocompanies.com/register.
regional population growth
and rising train traffic from
the ports have increased the
congestion, which is causing
increased delays at the
The Bradco High Desert Report
760.951.5111 • Fax: 760.951.5113 • www.TheBradcoCompanies.com • email: info@thebradcocompanies.com

29

High Desert Report
A quarterly economic overview

In the Home Building Industry, the Indicators May Finally Point Upwards
By Carlos Rodriguez
CEO Building Industry Association Baldy View Chapter

The inland counties of San Bernardino
and Riverside have always been the
ultimate beneficiaries of job creation
and housing demand that begins in the
more densely populated coastal counties;
San Diego, Orange and Los Angeles. So
homebuilders in San Bernardino County
(and most importantly the Victor Valley)
have always taken a special interest in
keeping a finger on Southern California’s
economic pulse.
And the pulse seems to be growing
stronger, according to an overall
assessment of the recent Inland Empire
2012 Builder Panel and Economic
Forecast presented by the Building
Industry Association (BIA) Baldy View
and the Riverside County chapters.
Summing up the general tenor of
the presentation, panel moderator
MetroStudy Director Steve Johnson
noted that the overall theme of the event
was that homebuilders “have changed
their processes, they’ve changed the
way they do things, they’ve changed the
products in search of success – and they
are getting that success this year.”

their product lines to include niche
markets such as multi - generational and
move up buyers, said Donna Lawler of
Orange Coast Title, Co. Projects such as
Lennar’s Rosena Ranch have adjusted
their product lines to provide homes for
these types of buyers, and will represent
the new face of construction in the Inland
Empire.
While the overall permit figures in
2012 may paint a fairly dismal picture,
the story they reveal is actually fairly
heartening, added BIA Baldy View
President Jonathan Weldy of Meridian
Land Development.

that the I-15 Corridor cities (Ontario,
Rancho
Cucamonga,
Fontana,
Hesperia, Victorville, Apple Valley
and the unincorporated county sections
surrounding those cites) accounted for
nearly two – thirds of the total permits
in the county – and nearly half of those
from Victor Valley cities.
Residential construction in the Victor
Valley and along the I-15 corridor cities
leading to the region holds the key to San
Bernardino County’s economic recovery,
and the Building Industry Association
(BIA) Baldy View Chapter maintains
programs to ensure it happens.
The big issue confronting builders in the
High Desert continues to be water and
every August for the past six years the
BIA Baldy View Chapter has presented
the Annual San Bernardino County Water
Conference. The conference focuses
on the key water issues confronting
home builders, such as conservation,
conveyance, and emerging new
technologies to maximize and conserve
our most precious resources.

Panelist McGuff observed that the overall
tenor of the event was to exhibit “positive
builder confidence out there and a lot of
pride in how far the industry has come
in meeting the buyers’ needs.” McGuff
noted that themes absent from previous
builder forecasts were beginning to
emerge, including indications of positive
job growth and builders’ heightened
interest in purchasing land.

According to figures from the
Construction Industry Research Board
(CIRB), in 2011, San Bernardino County
homebuilders issued about 1,465 singleand multi – family permits. While a
far cry from the nearly 17,000 permits
issued at the height of the building boom
in 2005, today’s figures show a far more
diverse building landscape. Where only
a fraction (less than nine percent) of the
overall permits issue in 2005 were for
multi – family housing, over the past few
years, homebuilders have been building
increasingly larger proportions of multi
– family housing. This is especially
important because when multi – family
housing was unable to keep pace in the
boom years, it forced many families
into riskier mortgages on single family
homes. With a graying population of
‘Baby Boomers’ and young people
finding dismal prospects in today’s job
market ‘boomeranging’ from colleges
back into their parents’ homes, offering a
greater diversity of housing opportunities
for our labor pools will offer businesses
a greater incentive to relocate or expand
in the region and create even more new
jobs.

Another aspect of the recovery is that
home builders are increasingly expanding

Assessing the permit totals always
tells a story. This year the story shows

Homebuilding remains the cornerstone
of our region’s economy, and there are

The event featured Panelists KB Home
Division President Steve Ruffner, Lennar
Division President Greg McGuff, Pardee
Home Director of Sales Peter Altuchow,
and Standard Pacific Division President
Marty Langpap assessing the building
climate as the industry enters 2012.

Keeping development impact fees (DIFs)
at realistic levels to spur economic growth
while maintaining the best possible cities
in Southern California is another key
factor in the chapter’s overall approach
to rehabilitating our housing markets.
Here in the Victor Valley, the Baldy
View Chapter continues to monitor all
development impact fees for cities, school
and water districts to ensure the fee’s
accuracy and proper implementation.
The chapter has also coordinated closely
with local, county, and state levels of
governance to monitor general plan
updates and development codes. We are
also working with our colleagues at BIA
of Southern California to advocate for
the balanced implementation of SB 375.

By Fran Clader, CHP
SACRAMENTO, Calif. – Danger
lurks behind the wheel when drivers
redirects their attention from the road
to some other distracting behavior, like
talking on a cellular telephone or text
messaging. During the month of April,
law enforcement agencies throughout
California will be especially focused
on taking enforcement action on these
inattentive, “zombie” drivers.
The California Highway Patrol (CHP)
along with the California Office of Traffic
Safety (OTS), Impact Teen Drivers, and
law enforcement agencies statewide are
preparing to launch the second annual
National Distracted Driving Awareness
Month campaign, “It’s Not Worth It!”
During the campaign kickoff month in
April 2011, more than 52,000 citations
were issued by law enforcement statewide,
four times the monthly average. A first
time citation will cost a minimum of
$159, with a second violation at least
$279.
“Drivers need to ask themselves, ‘Is that
phone call or text message worth my life
or the lives of those around me?’” said
CHP Commissioner Joe Farrow. “The
answer is simple: it’s not worth it. Every
distraction affects a driver’s reaction
time, and things can change without
notice.”
In recent years, hundreds of people have
been killed in California, while thousands
were injured, as the result of collisions
that involved at least one driver who was
distracted. This distraction can be any
activity that diverts the driver’s attention
away from the primary task of driving.
According to a study conducted by
Carnegie Mellon University, the act
of talking on a cell phone can reduce
more than 35 percent of the brain
activity needed for driving. Essentially
distractions change a seemingly good
driver into a “zombie” behind the wheel.
To dramatize this “zombie-like behavior

In the Home Building
Industry...
Continued

behind the wheel, zombies are being
added to this year’s “It’s Not Worth
It” campaign. The campaign will be
supported by statewide grassroots
outreach, social media activities, and
television commercials that encourage
people to focus on the road and not be a
“zombie” driver.
Law enforcement sees firsthand the
devastation caused by distracted driving
and the needless pain associated with the
senseless collisions that follow,” added
Commissioner Farrow. “I am grateful that
so many of the state’s law enforcement
agencies are joining us in this important
traffic safety endeavor again this year.”
More than 200 local law enforcement
agencies and 103 CHP offices will be
participating in the monthlong, lifesaving effort. Similar to the previous
year’s campaign, there will be both an
enforcement and educational component.
The overall goal is to reinforce to the
motoring public the dangers of distracted
driving and reduce the number of people
impacted by this destructive behavior.

some positive economic signs that the
construction industry and our economy
are headed in the right direction. We
remain optimistic that our industry
will emerge from this unprecedented
downturn and provide the engine for
the economic recovery that our region
desperately needs.
The Building Industry Association (BIA)
Baldy View Chapter represents homebuilders
and associates in the housing industry
in all of San Bernardino County and the
easternmost portion of Los Angeles County.
Founded in 1938, the Baldy View Chapter is
the most honored homebuilding chapter in
the nation. It is a member of the California
Building Association (CBIA), a statewide
trade association representing nearly
6,000 businesses, including homebuilders,
remodelers, subcontractors, architects,
engineers, designers, and other industry
professionals.

”Parents and other adults need to set a
positive example,” said OTS Director
Christopher J. Murphy. “Start by never
calling or texting anyone, especially your
kids, when there’s a possibility they might
be driving. Then let that same action
follow you when you are the driver.”
Among the more than 1,800 drivers over
the age of 18 who participated in last
year’s annual statewide traffic safety
survey conducted by OTS, talking and
texting on a cellular telephone were
rated the two biggest safety problems on
California’s roadways. In fact, talking
on a cellular telephone (handheld or
hands-free) was identified as the most
serious distraction by 56 percent of the
respondents.
Adults are not the only offenders when
it comes to distracted driving. According
continued on page 31

For each month during 2004 and 2005,
an average of 600 new homes were
completed and sold; and an additional
500 to 600 previously owned homes
were also purchased. The vacancy level
for housing was low; and builders were
not able to deliver homes fast enough.
The median price for previously owned
Single Family homes peaked in February
2006 at $322,000. In March 2012 the
median home price in the High Desert
for the Victor Valley Area was $110,000.
Home prices have declined 65% from
the peak. Over the last year the median
home price increased by only $79
with home prices fluctuating between
$106,000 and $112,700; consequently
home prices today are statistically the
same as they were a year ago. The table
below published by Bob Thompson is
the Market Condition Report for March
2012.
Home prices in the High Desert and
elsewhere have probably been stable
because Fannie Mae, Freddy Mac
and the FHA along with some of the
major financial institutions appear to be
controlling the number of homes they
release for sale in order to keep home
prices from declining substantially from
current levels. Some economists believe
that an additional 15% to 20% decline
in home prices across the United States
would substantially weaken the financial
strength of banks and cause undue
hardship to many homeowners. If in fact
these institutions have elected to carry
the homes in their portfolios rather than
dumping the units on the market, they are
probably implementing a constructive
policy given the current state of the
economy.
During 2004 and 2005 the number of
outstanding listings averaged 2,500,
which represented four to five months
of sales. As of February 2012 there were
only 1,063 homes listed for sale in the
Victor Valley area.An average of 477

homes was sold each month. Hence the
number of listings on the Victor Valley
MLS represents slightly more than a
two month supply. Also, a review of
the second page of the Market Condition
Report would reveal that only 209 REO
homes were listed for sale at the end
of March, which is less than the 224
units sold in that month. For whatever
reason, the financial institutions are not
listing homes that they acquired through
foreclosure, even though some real estate
agents claim more homes could have
been sold if more properties had been
listed.
REO and Short Sales accounted for
67% of the transactions in February
2012.This is down from 74% a year
earlier.This is a positive trend because it
indicates properties that were foreclosed
on represent a declining portion of
the sales activity. Many of the buyers
were investors who rather than owner
occupants renovate the homes and either
resell the units; or lease them to renters
who are not able to purchase a home.
The demand for Single Family homes
has been artificially increased because
of policies of the Federal Government.
Interest rates are extremely low and down
payments could be substantially below
20% of the purchase price. Individuals
are purchasing homes in the High Desert
with as little as 3% down. On the other
hand, the underwriting criteria and
documentation requirements are far more
rigorous and extensive than normal; and
the requirements for home appraisals
tend to place a downward pressure on
home prices. The effect of all this is to
make home prices in the High Desert the
most affordable in Southern California.
Many individuals want to know when
the construction level for Single Family
homes will begin to rebound. Some
analysts believe the rebound could begin
in earnest as early as 2014 while others

to the National Highway Traffic Safety
Administration, teen drivers are more
likely than any other age group to be
involved in a fatal crash where distraction
was involved.
“Teens, even more than adults, are
accustomed to using technology to have
instant access to their friends. It’s not
only technology – teens are frequently
distracted by loud music, passengers,
and other everyday tasks that, when done
behind the wheel, become lethal,” said
Dr. Kelly Browning, Executive Director
of Impact Teen Drivers. “These everyday
distractions, coupled with inexperience,
often have deadly consequences.”
This year, National Distracted Driving
Awareness Month coincides with
California Teen Safe Driving Week,
which is the first week of April. For
nearly five years, Impact Teen Drivers,
a non-profit organization, has been
providing awareness and education to
teenagers, their parents, and community
members about all facets of responsible
driving, with the goal of reducing the
number of injuries and deaths suffered
by teen drivers as a result of distracted
driving and poor decision making.
Age aside, California’s traffic safety
partners are asking for the public’s help
in making this April’s distracted driving
awareness campaign successful.
“It is important to note that the success
of this campaign is not measured by
the number of citations the officers
write, because we are hoping that by
calling attention to this effort we will
gain voluntary compliance,” added
Commissioner Farrow. “The success of
the campaign is measured by the number
of lives saved.”
Don’t be “zombie” drivers; focus on
the task of driving when you are behind
the wheel. Remember, whatever the
distraction, “It’s Not Worth It!”

The High Desert Single Family Market Appears To Be Stabiling.
Continued

believe it will be another seven years
before new home construction reaches
3,000 units per year or 40% of the peak
volume of the last real estate cycle.

very precise estimates, but they do
provide a sense of the overbuilding that
occurred during the last housing bubble.

The Inland Empire and the High Desert
The construction of Single Family homes
housing markets will be in equilibrium
will ramp up when the excess vacancy in
when these excess units are occupied,
the High Desert and the Inland Empire is
as a result of household formations.
absorbed due to an increase in household
The number of households in the Inland
formations. There are 2,000,000 to
Empire and the High Desert is expected
2,500,000 excess vacant housing units
to increase because of population growth,
in the United States, which are defined
driven by the formation of jobs and an
as the number of vacant units in excess
increase in the number of retired people.
of normal vacancy levels for a market
Many real estate analysts and economists
area. The normal vacancy level for Los
estimate it will take another five years
Angeles County is approximately 3.5%,
before the excess of vacant housing units
whereas the normal vacancy level for the
are absorbed. There are an estimated
High Desert is around 5%. There are an
150,000 jobs in the Inland Empire
estimated 40,000 to 70,000 excess vacant
previously lost in the Great Recession
far more rigorous and extensive than normal; and the requirements for home appraisals tend to place a
housing units in the Inland Empire and
that still have to be replaced.
downward pressure on home prices. The effect of all this is to make home prices in the High Desert the
between 5,000 and 7,000 excess vacant
When the excess vacancy is absorbed
most affordable in Southern California.
units in the High Desert.These are not
home prices are expected to increase to

the replacement costs for new homes.
Home builders will only build new homes
if they think they can sell the units for
more than their costs to build and earn a
normal profit for their effort. This could
result in home prices in the High Desert
increasing between $50,000 and $70,000
per unit from current levels.This would
only occur if the U.S. and California
economies continue to expand, creating
jobs that could support population growth
and substantial household formations in
the High Desert. The good news is that the
population of the High Desert appears to
be almost stable over the last three years,
and the U.S. Census Bureau estimates
the population of California increased by
439,000 during the 15 months following
the 2010 Census. This is discussed in
another article on population in this
Bradco High Desert Report.

By Brad Mitzelfelt, 1st District Supervisor, San Bernardino
Economic and environmental problems
with the mega solar projects now being
erected on federal land in our Southern
California deserts have been the subject
of several stories in local and regional
media recently.
One major aspect of the issue has
not been addressed in that coverage.
Solar energy development on public
lands not only affects species and their
habitats; it has potentially profound
impacts on local government, future
economic growth, and other historic
uses of the desert, including recreation,
off-highway vehicle use, and mining,
among others.
We fear that expansive solar
developments, because of their
impacts to species and the imposition
of draconian mitigation requirements,
could result in locking down the rest of
the desert, creating an impenetrable de
facto wilderness area, and eliminating
a critical array of economic activities,
while denying the right of our citizens
to enjoy the public lands they own.
More than 80 percent of San Bernardino
County is in federal ownership, and
multiple uses on those lands – ranging
from a variety of recreational activities
to filming to mining – have long been
critical to a sustainable and vibrant
local economy.
As the elected county supervisor who
represents 15,600 square miles of San
Bernardino County, including the sixsquare-mile Ivanpah Solar Electric
Generating Station just this side of
Primm, Nev., it is clear to me that
the strategies and costs of protecting
species from this headlong rush toward
renewable energy are unsustainable
and unacceptable.

Projects that disturb or destroy habitat
must make up for that loss by purchasing
private land at ratios of 2-to-1, 3-to-1,
even 5-to-1. In San Bernardino County,
just three solar projects on federal land –
BrightSource’s Ivanpah project, K Road
Power’s Calico project on Interstate 40
east of Barstow, and a project proposed
by First Solar immediately adjacent to
Ivanpah – will require the acquisition
of nearly 22,000 acres of private land
or roughly 34 square miles. That’s an
area larger than Glendale that must
be purchased, provided the required
mitigation ratio is “only” 2-to-1.
That land comes off the tax rolls,
reducing revenue and further straining
the ability of local government
to provide essential services, and
precludes any other uses that provide
sustainable recreational and economic
opportunities. (Note that Abengoa
Solar’s 250-megawatt Mojave Solar
Plant, now under construction northwest
of Barstow, is on private, previously
disturbed agricultural land and requires
minimal mitigation.)
Under the current mitigation strategy,
it would take only a few more of these
mega-projects to take out the remaining
available private land in the desert, and
render future development, solar or
otherwise, virtually impossible.

I also called for the protection of historic
uses on public lands, including hiking,
camping, rock hounding, off-highway
vehicle use, grazing and mining. If a
solar project eliminates one or more
of those opportunities where they
existed previously, then other public
land should be made available for the
affected uses. Those positions were
ultimately adopted by not only San
Bernardino County, but the National
Association of Counties.
Solar development clearly is going to
be part of the multiple-use mix on our
public lands. Given the construction
industry in the Inland Empire has been
devastated with the loss of more than
76,000 construction jobs since the peak
in 2006, the employment opportunities
created by large solar projects are badly
needed.
However, at the local government level,
we are striving to help our state and
federal colleagues understand that these
projects must not restrict or eliminate
other uses that have provided economic
benefits for more than a century.
Brad Mitzelfelt is vice chairman of
the San Bernardino County Board of
Supervisors and represents the First
District, which includes a large portion
of the Mojave Desert.

I advocated a policy that broadly
supports the development of renewable
energy, but rather than relying solely
on the purchase of private land for
mitigation, calls for developers to
pay into a fund for aggressive and
scientifically supportable strategies to
enhance, preserve, and protect species
and their habitats on existing federal
land.

By Orlando Acevedo, Economic Development Manager
That Can’t Be Good
In 2011, action by the California
legislature and governor eliminated
the state’s redevelopment program.
In a clear taking of local funds to
help balance the state’s enormous
budget deficits, Assembly Bill 26 set
into motion legislation that would
eventually be decided upon by the
state supreme court and would end
one of the most effective job creation
tools in California.
As a result, the Town of Apple
Valley has established itself as the
Successor Agency to the dissolved
Apple
Valley
Redevelopment
Agency (AVRDA) to carry out
many of its obligated projects and
contracts. Moreover, an Oversight
Board, comprised of representatives
of local taxing entities, was created
to formally dissolve the Successor
Agency of the former AVRDA of all
its enforceable obligations, including
debts, agreements, and disposition of
assets.
When the redevelopment program
was dissolved by the state, it put
an end to the AVRDA that helped
create more than 5,600 jobs, infused
$55 million into the local economy,
revitalized blighted areas, facilitated
needed infrastructure expansion,
funded residential rehabilitation and
much more.
So What’s the Solution?
The legislature seems to be
acknowledging the drastic and
unintended consequences of AB
26, and there have been recent bills
introduced to alter AB 26 timelines
and deadlines and potentially free
up certain unencumbered funds
for housing and other activities for
which the revenues were intended.

Municipalities all over the state
are getting a game plan together to
find alternative ways to provide
the services that were formerly
the function of the redevelopment
agencies. Apple Valley Town
Manager Frank Robinson was
appointed
to
the
Economic
Development Task Force for the
League of California Cities. As
a representative for the Desert
Mountain Division, Mr. Robinson
will help formulate strategies to
accomplish this undertaking.
Pressing On
Attracting jobs to Apple Valley
remains a high priority for Town
staff and its residents. According to
a recent community survey, when
asked to prioritize among a series
of projects and programs that could
be funded by the Town of Apple
Valley in the future, providing
incentives to attract new employers
and jobs to town was assigned the
highest priority by 71 percent of the
respondents.
As such, the Town is resolved to
preserve key capital projects which
add jobs and investment to the
local community, despite the recent
redevelopment dissolution. One
project in particular that the Town
is striving to preserve is the Yucca
Loma Bridge.
The Yucca Loma Bridge
The excitement is building as the
Town of Apple Valley makes further
progress on the long-awaited Yucca
Loma Bridge. The number one
transportation priority of the Town
since 2005, the Yucca Loma Bridge
is a necessary and much anticipated
project that will improve east/
west travel across the High Desert.

Studies have shown that, in time, no
amount of improvements to existing
corridors will relieve the increasing
traffic congestion on our already
established east/west travel routes,
so the success of this project is vital
to our region.
With an estimated price tag of $31
million for the first phase, the project
is moving forward into the right of
way acquisition and construction and
is anticipated to begin construction
late this summer. A formal funding
agreement with SANBAG for
construction was scheduled to
appear before the SANBAG Board
of Directors at their April 4 meeting.
We have high hopes that the Apple
Valley portion of this project will be
complete by January 2014.
Incoming Retail
The 240,000-square-foot Walmart
Super Center, planned for construction
on Dale Evans Parkway just north of
Civic Center Park, is on a course for
completion by this fall. Crews have
successfully cleared and grubbed the
30-acre site and Walmart is in the
process of evaluating construction
bids. Award of the bids is anticipated
to be sometime in April after which
time the developer will schedule a
groundbreaking. Walmart has a very
aggressive construction schedule and
anticipates completion of the store
by late October.
For more economic development
information visit www.GetASlice.
org. For general Town information
visit www.AppleValley.org

By Oliver Chi, Assistant City Manager
During the past several years, the City
of Barstow has certainly experienced
its share of negative impacts from the
downturn in the economy. Even today,
the signs of economic distress can be
seen throughout the community as
Barstow still has an unemployment rate
of 16.4%. Unequivocally, there is still
much work that needs to be done.
When looking at the situation globally,
however, the City of Barstow believes
that there is much to be optimistic
about. Signs of an economic turnaround
can be found when looking at statistical
data. In addition, several projects are
underway that have the potential to
make dramatic economic improvements
in the community.
From
a
statistical
perspective,
one measure that illustrates how a
community’s economic health is
trending can be seen through tracking
the area’s median income levels. In
the 2000 census, the Barstow area had
a median income level of $35,069. As
of the 2010 census, the median income
levels for the Barstow area had increased
around 37% to $48,042. This data
means that the quality of the jobs in the
Barstow area is improving and points to
a positive trend for the local economy.
In addition to the statistical data, the city
has been working on several important
economic development projects that
have the potential to significantly
improve the overall quality of life in
Barstow.
Current significant projects that are
underway in the community include the
following:

Barstow Community Hospital
Project
During the past several years, the city
has been coordinating with Community
Health Systems, Inc., on building a brand
new state-of-the-art medical facility
in town. In late 2012, those efforts
will culminate with the opening of the

new Barstow Community Hospital.
The ultra-modern three-story, 82,500
square feet facility will feature 30
private rooms, a high-tech emergency
room, a modern intensive care center,
a technologically advanced diagnostic
imaging department, and innovative
laboratories & surgical rooms. All told,
building the updated facility required
around 3,283 cubic yards of concrete,
over 65 tons of concrete reinforced
rebar, 476 tons of structural steel, and
over 120,000 square feet of fireproofing
material. When the new hospital is
complete, the overall project will have
constituted an estimated investment
of around $80 million in the Barstow
community.

Lenwood Grade Separation
The city has been working diligently
with the County of San Bernardino and
SANBAG to coordinate the construction
of the Lenwood Grade Separation project.
A number of design enhancements have
been coordinated during the past several
months and the project team is currently
working on finalizing the engineering
work and right-of-way coordination for
the new bridge. In total, the Lenwood
Grade Separation will cost an estimated
$31.5 million and is on schedule to
begin construction in 2013.

Fort Irwin Projects
Fort Irwin and the United States Military
have made a concerted effort to involve
the local community in a variety of
currently planned projects. While there
are numerous improvements being
coordinated by Fort Irwin, the two
most significant initiatives include the
construction of a $100 million water
treatment plant and a $400 million
hospital facility. These two projects,
which will total an investment of over
half a billion dollars in the greater
Barstow area, are scheduled to break
ground within the next year and are both

scheduled for completion in 2015.

Redevelopment Dissolution
Impacts Minimal for Barstow
On December 29, 2011, the
California Supreme Court upheld the
legislation that effectively dissolved
redevelopment agencies throughout the
state. However, in Barstow, the city had
created contingency plans over a year
ago in anticipation that redevelopment
agencies could be eliminated. The
strategy that the city developed was
focused on developing enough capacity
within the General Fund to absorb
necessary RDA expenses. For example,
several employee positions that were
previously paid for with redevelopment
monies were transitioned to General
Fund roles as part of the FY 11/12
Budget.
In addition, a new cost
allocation formula that was instituted
with the budget called for the RDA to
pay for fewer General Fund expenses
than in prior years. When the Supreme
Court ruled that redevelopment agencies
in California were to be dissolved, the
City of Barstow was ready to address
the situation. While the dissolution of
the RDA does create a financial impact
on the city, overall, the elimination of
redevelopment will not require any
reductions or modifications to the city’s
current operations.
In addition to projects that are currently
underway, there are several significant
initiatives that are in the planning phase.
An overview of those projects includes
the following:

Wal-Mart Distribution Center
The city has continued to stay in close
contact with representatives from
Wal-Mart regarding the proposed
construction
of
a
cold-storage
distribution center located adjacent to
the city’s planned Industrial Park. In
every conversation that the city has
had with Wal-Mart, the message has
continued on page 36

remained consistent. Wal-Mart is still
planning on constructing the distribution
center in Barstow; however, the project
is waiting for approval from the WalMart Logistics Department. Given the
recent number of Wal-Mart Supercenter
conversions occurring in the high desert
and throughout Southern California, in
addition to the announcement that WalMart will be testing a small-store format
called Wal-Mart Express, it is likely that
the distribution center in Barstow will
be approved for construction in the near
future.

Wal-Mart Supercenter Expansion
During the past several months, WalMart representatives have made contact
with the city regarding expanding the
current Wal-Mart store on Montara
Road into a Supercenter format. In fact,
Wal-Mart has developed and submitted
for city evaluation two separate site
plans for review and consideration.
The proposed project would include
additional retail outlet options in
addition to a new Wal-Mart Supercenter.
While the city has streamlined its
permitting process to allow for quicker
approvals, it is anticipated that the WalMart expansion project is around a year
away from being finalized. There are
a number of environmental issues that
need to be coordinated and Wal-Mart
is still in the process of determining the
type of project they would like to have
constructed.

Barstow Casino & Resort Project
The Barstow Casino & Resort Project,
which is being pursued as a partnership
project between the Los Coyotes Band
of Cahuilla & Cupeňo Indians and Bar
West Gaming, is still a viable initiative
that is in the review process. In order
for the initiative to move forward,
both the Federal Government and the
State of California will have to agree
to allow the project to be constructed.

Currently, the Federal Government’s
Department of the Interior is evaluating
the proposed Barstow Casino & Resort
project, and a public hearing on the
environmental impact statement was
held last July. If the Department of the
Interior approves the project as meeting
federal guidelines, the next step in the
process would be negotiating a contract
with the Office of California Governor
Jerry Brown. That contract would also
have to be approved by the California
State Legislature. In an effort to give
the Barstow Casino & Resort Project the
best chance of gaining State approvals,
the city is in the process of determining
how to hire a State lobbying firm. If all
the approvals are obtained, the overall
casino project could be constructed in
2013 or 2014.

Barstow Industrial Park
Another significant initiative that the
city is coordinating is the revival of
the Barstow Industrial Park project. In
total, the Barstow Industrial Park spans
over 1,174 acres and is located around
3 miles northwest of Interstate 15 and
around 5 miles west of the Interstate 15
/ Interstate 40 interchange. Recently, a
new developer purchased the industrial
park property, which had been in a state of
foreclosure. Since then, the city has been
in contact with the new property owner
regarding future plans for the location.
Discussions are currently underway
regarding infrastructure concerns,
utility coordination / installation issues,
and the potential of obtaining rail-spur
access for the site. The city will be
working with the developer during this
next year to coordinate and implement
the solutions needed to ensure that
the Barstow Industrial Park becomes
the high desert’s premier logistics,
manufacturing, and distribution hub.

in the Barstow area that are either
underway or in the planning process
illustrate that...
…Barstow is strategically situated
midway between Los Angeles and Las
Vegas.
…Barstow is a major transportation
corridor that serves more than 60 million
travelers and 19 million vehicles each
year.
…Barstow is where the Interstates
15 & 40 and Highways 58 & 247 all
converge.
…Barstow is home to the Barstow
Outlets and Tanger Outlets, which
provide shopping options that are usually
only found in metropolitan areas.
…Barstow is where an eclectic mix of
railroad, military, high technology, and
mining employers have located.
…Barstow is home to a vibrant and
caring community
.…Barstow is at the crossroads of
opportunity… where the best is yet to
come.
Any individual who would like to learn
more about all that Barstow has to offer
is encouraged to visit the city’s website
at www.barstowca.org or to contact
Oliver Chi, Assistant City Manager,
via email at ochi@barstowca.org or by
telephone at (760) 577-4510.

While the overall economic situation
is still challenging, the current projects

By Lisa K. LaMere, Economic Development Management Analyst
Ranchero Road Underpass Project
The Ranchero Road Underpass broke
ground on August 31, 2011, and is
approximately 20% complete at the
time of this writing, with the bridge the
focus of construction. It is expected
that the bridge should be completed in
summer 2013.
The project is progressing slightly
ahead of schedule and this alternate
east-west route through the southern
portion of the city should be accessible
to residents by early fall of 2013.
These improvements, stretching from
Danbury Avenue on the east side to
Seventh Avenue on the west, will
greatly improve traffic options for
travelers of the entire High Desert.
On the Right Track
The G Avenue Industrial Rail Lead
Track was completed in March, with
a ribbon cutting ceremony held on
April 19, 2012. Consisting of nearly
one mile of new railroad lead track
and a parallel runaround track, it will
be served by Burlington Northern
Santa Fe Railway and allow adjacent
properties rail access.
Business attraction efforts are a priority
for the project, which will stimulate
development and indirectly influence
the attraction and expansion of other
businesses into the 1,300-acre ‘I’
Avenue Industrial area. In addition, a
future Team Transload facility would
foster entrepreneurship by making rail
accessible to businesses throughout
the region that will now be able to
ship and receive goods with the use of
a Team Transload facility.
Now Open for Business
Victor

Valley

Transit

Authority

recently received the certificate
of occupancy for its new facility.
Located on E Avenue and Smoketree,
the complex consists of a 28,820
square foot administrative building
and more than 43,000 square feet
for maintenance, fuel, and washes
facilities.
Sleep Number opened the doors of
its 2,400 square foot bed and bedding
store in High Desert Gateway.
Also located in the High Desert
Gateway, the new 20,005 square foot
JoAnn Fabric and Crafts store, near
Marshall’s, opened on March 9, 2012.
Jo-Ann executives, dignitaries, City
representatives and 150 Jo-Ann fans
were on hand for the ribbon cutting
ceremony held on March 22 to kick
off the grand opening celebration.

Are your property taxes too high?
Did you know that you have a right
to appeal your property taxes?
If you are a property owner in the
County of San Bernardino you may
be able to appeal the current assessed
value of your property.
The regular filing period for the
County of San Bernardino is July 2nd
through November 30th.
For more information, you can
contact your local County Board of
Equalization via the
Clerk of the Board’s office at
www.sbcounty.gov/assessmentappeals
or call (909) 387-4413.

A new 7,147 square foot AutoZone on
Main and Maple opened in April.
The Pepper Olive Café, offering
breakfast, lunch, and dinner, leased
1,737 square feet of restaurant space
closest to Eleventh Avenue in the
Hesperia Marketplace on Main Street.
What’s in store for the future …
The City of Hesperia has received
plans for construction or tenant
improvements for the following
businesses:
The long-awaited 194,183 square
foot Walmart Supercenter is taking
shape, evidenced by the completed
construction of exterior walls. With
the completion of parking lot lighting
and asphalt being laid down in April
to the 43.84-acre site, an opening in
September is expected.
In addition to the Supercenter, a second
continued on page 38

major 180,000+ square foot anchor is
available, as are 65,000 square feet
of retail and restaurant space on 7.6
acres of this site along Escondido and
fronting Main Street.

been issued permits for a 9,360 square
foot, 3-story medical office building.
Their future site is located west of
Eleventh Avenue on the north side of
Main Street.

Following the purchase of the
Midtown Square Albertsons building
in 2011, Stater Bros. is readying the
former Albertsons for a proposed
spring opening as a Blue Ribbon
Stater Bros. Supermarket. Currently
undergoing major renovations to the
new 20,000 square feet grocery store,
including replacing the deli, bakery,
and prep rooms, the new Stater Bros.
location replaces the smaller Stater
Bros. market along Main Street and E
Avenue.

Lewis Retail Centers has been issued
permits for a 10,467 square foot retail
space in the High Desert Gateway
center, anchored by Super Target.
The as-yet undisclosed tenant will be
located between Marshall’s and JoAnn Fabric and Crafts.

Beef ‘O’Brady’s, a Tampa-based
franchise, has sited its first California
location in Hesperia with a 6,009 square
foot concept seating approximately
250 patrons. In early April, the family
sports restaurant and pub began its
transformation of the former Bob’s
Big Boy located at Main Street and
Cataba. Featuring 19 big-screen TVs
and a diverse lunch and dinner menu,
Beef ‘O’ Brady’s anticipates a summer
opening.
Tenant renovation is currently
underway on a 2,250 square foot
microbrewery, complete with tasting
room, in an establishment located
on Poplar Street near Three Flags
Avenue, west of I-15. Renovations
should be completed in April.
Hesperia will soon be home to
additional medical offices. In the
early planning stages is a 2-story,
14,360 square foot medical building
to be sited on Main Street, east of
Cottonwood. Main Street Medical has

Desert Discount Tires will soon
complete Phase I of its 4,973 square
foot 2-phase expansion plan, which
includes shop areas, 5 bays and office
space.
Ground Breaking Project
A first for Hesperia, a 37,000-squarefoot movie theater from developer
Cinema West broke ground on February
23. The Hesperia Cinema 12 will soon
join more than 188,000 square feet
of development in Hesperia’s Civic
Plaza. Creating 40 new jobs, the new
theater features start-of-the-art digital
technology and stadium seating for

1,700 movie-goers.
Residents
have
long
desired
entertainment venues in Hesperia, and
with popcorn in hand, they will have
their choice of 12 movie screening
options, including two IMAX-sized
screens. The Hesperia Cinema 12 also
features both game and party rooms.
Uniquely, it will be the first cinema
in the High Desert to serve food and
alcoholic and non-alcoholic beverages
to seated movie fans in a new theatergoing concept known as a “meal and a
movie” in two screening rooms limited
to patrons aged 21-and-over.
Look for a grand opening in time for
the Christmas movie season this year.
To find out more about operating in
one of the most innovative enterprise
zones in the country, or to request
information about Hesperia’s retail
or industrial opportunity sites, contact
Steven Lantsberger at (760) 947-1906,
by e-mail at econdev@cityofhesperia.
us; or visit www.cityofhesperia.us/
econdev.

City of Victorville – Spring 2012
By Keith Metzler, Assistant City Manager

As the geographic and commercial
center of the High Desert, Victorville’s
resurgence is leading the way for
continued growth in the region. Nowhere
is that more apparent than with the
construction of the Nisqualli/La Mesa/
Interstate – 15 interchange.
City officials have partnered with
SANBAG and CalTrans to bring
the interchange project to life, with
construction already underway and a
completion date set for early fall 2013.
The interchange will alleviate traffic
congestion by providing a new east/
west route through the Victor Valley.
The interchange was recently named the
2011 Public CEO Public Works Project
of the Year by PublicCEO.com.
The most active area of development
within the city is at Southern California
Logistics Airport (SCLA). Recently
industrial companies, such as United
Furniture Industries and M&M/Mars
have brought in over 130 jobs to the
region in the last six months. Aviation
operations at SCLA continue to be
in demand, with several companies
extending lease agreements for hangar
and office space at the airport.
Southern California Aviation, a tenant
at SCLA since 1998, has extended its
current lease agreement for four more
years with an additional five year option
beyond that. The lease covers Southern
California Aviation’s building space,
consolidation area and ramp usage on its
240-acre site. Boeing, a tenant at SCLA
since 2005, has extended several of its
leases at SCLA through December 2012,
including its hangar and office space as
well as a storage facility.
Victor Valley College has also extended
its aviation technology training program
at SCLA, with 25 more students
beginning classes in the summer of
2012. The students will receive hands-on
training at SCLA, including 2,000 hours
of documented class and lab instruction.
Many of the current students within
the program are hired for entry level
positions with SCLA companies while
still in school. Upon graduation of the

two year program and FAA certification,
a licensed Airframe & Powerplant
technician typically makes $25 an hour.
In addition to the dynamic activity at
Southern California Logistics Airport,
Victorville has seen an influx of
commercial and retail development. A
local Hyundai car dealership is expanding
its space to add a new Mazda dealership,
with over 8,500 square feet of new show
room and office space currently under
construction. The new dealership will
be located on the corner of Palmdale and
Anacapa Roads.
The Mall of Victor Valley is also
expanding, with construction taking place
on two of its anchor locations. Macy’s
has announced it will open a 103,000
square-foot anchor at the former site of
Gottschalks by mid-2013. JCPenney’s
has also announced plans to move from
its current location to the expanded
anchor slot of almost 100,000 square
feet that is currently under construction.
JC Penney’s new location will double its
current size and is set to be complete by
the end of 2012.
A new 193,000 square-foot Walmart is
currently under construction at Dunia
Plaza, sitting on the southwest corner
of Interstate -15 and Bear Valley Road.
The Walmart will be located next to the
existing Lowe’s and Kohl’s anchors
and will open in mid-2012. Another
Walmart at the corner of Highway 395
and Palmdale Road is currently in the
planning stages.

development of Southern California
Logistics Airport. Because of these
projects, the City now enjoys increased
sales tax revenue that helps provide our
current level of Police and Fire services.
Without the redevelopment agency, there
would have been little the City could
have done to directly influence the type
of development we see today.
Now that redevelopment has been
eliminated, the City of Victorville’s
ability to encourage new industries has
been substantially weakened and the
City will not have the ability to be as
responsive to the community’s demand
for jobs in an economy that is desperate
for employment. To adjust, Victorville
will have to become creative if it wants
to develop a more balanced local
economy.
New industries, such as manufacturing
food and beverage products, aviation
flight testing and maintenance services
for commercial aircraft currently taking
place at SCLA is a good step in the right
direction. However, the current and
future City Council must be prepared
to make hard decisions about creating
special industry attraction programs,
including low cost financing, re-tooling
its use of federal and state grant programs,
developing revolving loan programs,
fee deferral, sales tax sharing programs
and continued use and expansion of its
Municipal Utility services to compete
for businesses in a global economy.

Elimination of Redevelopment
On February 1, 2012, redevelopment
as we have known it was eliminated by
the Governor and the State Legislature.
Many residents of Victorville may not be
aware of the impact this will have on our
local community.
The Victorville Redevelopment Agency
was directly responsible for much of
the development in the city the past
decade, including the AutoPark at Valley
Center, the Roy Rogers interchange and
accompanying development, Bear Valley
Road/Hesperia Road Corridor, and the

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Factual economic information about the Inland Empire North/e corridor, including the cities of Adelanto, Barstow,
Hesperia, and Victorville, the Town of Apple Valley, and northern San Bernardino County
Published since May 1993
Sales and permit trends
Economic analysis
Updated overview of quarterly absorbency rates of commercial, industrial, and office space
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The most condensed, up-to-date, factual business information from highly respected professionals, effected property
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Quarterly comments by Dr. Alfred Gobar, renowned real estate economist, Alfred Gobar Associates,
(Anaheim, California)
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